China’s tech giant Huawei recorded modest revenue growth for the second quarter on Thursday, October 27, reflecting that U.S. sanctions have a less severe impact on its business. However, it’s still far from its peak when the once giant faces fierce competition from rivals.

According to Reuters, Huawei posted revenue of 445.8 billion yuan ($62 billion) for the first three quarters, lower than 10 billion yuan compared to a year ago.

Despite revenue growth of 6.5%, its profits dropped to 26.75 billion yuan, down 42.45% year on year, based on Reuters calculations. The company cited investment in research and development and new business for the drop.

Chairman Eric Xu told Reuters, “The decline in our device business continued to slow down, and our ICT infrastructure business maintained steady growth.”

The U.S. placed Huawei on the trade blacklist in 2019, banning them from buying American technology without a U.S. government license. In 2020, the Federal Communications Commission classified Huawei as national security threats to U.S. communications networks.

The sanction severely hurt Huawei’s handset business, which dominated 42% of the China market in 2019. The firm is now struggling with its business and left behind its competitors. It even lags behind its former budget smartphone Honor, which it sold in 2020.

Two weeks ago, the U.S. Federal Communications Commission announced plans to ban approvals of new Huawei telecommunications devices sales and three other Chinese companies for national security concerns.In a separate move, the Justice Department on October 24 announced charges against two Chinese intelligence officials who tried to bribe U.S. agents to disrupt the Huawei case.

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