Wanna know the real-life consequences of tech sanctions? Just ask Huawei. The Chinese tech giant is being forced to sell its server business. Even though it’s not a core business for Huawei, it was developed for its the company’s cloud-computing business.
This is not the first time Huawei has been forced to sell a line of business because of US sanctions. In 2020, it sold its smartphone brand Honor due to the US’s decision to ban certain American tech companies — such as Qualcomm (QCOM) — from providing critical components to Chinese companies.
why it matters
The succession of different sanctions is taking a heavy toll on Huawei. In the third quarter of 2021, the company witnessed its revenue drop 38% to $21.2b.