Huawei slashes revenue forecast amid continued US pressure

• Huawei CEO and founder Ren Zhengfei said the company's revenue will be about $100 billion for 2019 and 2020.
• Ren said that Huawei will reduce its production capacity which will equate to a $30 billion hit to revenue versus its forecasts.
• He also said that over the next two years, Huawei will "do a lot of switch over of different product versions," but did not specify if it meant finding replacements for American components.
• "We are strong, I think there is no way we can be beaten to death," he added.

A Huawei logo is displayed at a retail store in Beijing, China on May 27, 2019.

Fred Dufour | AFP | Getty Images

Huawei will reduce its production capacity which could hit revenue growth, the CEO of the Chinese tech giant said on Monday, as he revealed his plans to deal with the continued pressure from the U.S.

"In the next two years, I think we will reduce our capacity, our revenue will be down by about $30 billion dollars compared to forecasts, so our sales revenue due this year and next will be about $100 billion," Ren Zhengfei, founder of the telecoms equipment giant said, adding that the firm will regain its "growth momentum" after 2020.

Huawei is currently on a U.S. blacklist that restricts American businesses selling products to the Chinese firm. The restrictions have affected Huawei's business as it relies on American suppliers for components and software in several of its products including smartphones and laptops.

Huawei reported revenue over $100 billion for the first time in 2018 — about 19.5% higher than 2017. Ren's comments suggest that revenue growth will be roughly flat in 2019 and 2020.

We are strong, I think there is no way we can be beaten to death.

Ren Zhengfei

Huawei founder

Ren said the company is also looking at creating different versions of its products.

"In the next two years, we are going to do a lot of switch over of different product versions that will take time and that will take time to ramp up, and it will take some time to test whether that works," he said in Mandarin, according to a Huawei translation. "After that step, we will be stronger."

Ren did not specify whether this meant using components from different suppliers.

Huawei has been developing its own operating system, which CNBC reported could be ready later this year in China. The company was also forced to scrap a planning laptop launch. Huawei's consumer business CEO Richard Yu told CNBC that the move was a result of the company being on the U.S. blacklist.

Ren said the company will continue to work with American companies if it can.

"In the past, when we were not as strong, we were determined to work together with U.S. companies. In the future, we will be more determined to work with US companies. We are to afraid of using U.S. components, we are not afraid of using U.S. elements," Ren said.

"We are strong, I think there is no way we can be beaten to death," he added.