Huawei sees 9 per cent sales growth in 2023 as it bounces back from US sanctions, but cautions on ‘serious challenges’ ahead

Huawei Technologies expects its sales to surpass 700 billion yuan (US$99.1 billion) in 2023 after the US-sanctioned Chinese telecommunications giant launched a new 5G smartphone and amid multiple efforts to diversify its revenue streams.

This would mark a 9 per cent year-on-year increase in total sales for the full year from 642.3 billion yuan in 2022, better than the slim 0.9 per cent increase then and an improvement from 2021 when revenue plunged 28.6 per cent.

The achievement shows that the Shenzhen-based firm is “pretty much back on track”, according to a new year’s message from Huawei’s rotating chairman Ken Hu Houkun on Friday.

However, Hu also warned of “serious challenges” ahead in 2024 and urged employees to avoid “blind optimism”.

“Geopolitical and economic uncertainties abound, while technology restrictions and trade barriers continue to have an impact on the world. Together, these forces are reshaping business models and the global value chain,” Hu said.

Huawei, which briefly surpassed Samsung Electronics to lead global smartphone shipments in early 2020, has been battling US sanctions that hit its smartphone business and overseas sales hard in the past few years. It has been forced to diversify its revenue sources by venturing into new areas such as smart car systems, while looking to revive its handset businesses.

Huawei EV Aito, M7, featuring cutting edge, autonomous driving technology, is displayed in a Huawei shop in Beijing, China, on Sep. 17, 2023. Photo: SCMP/Simon Song

In late August, the company surprised the industry with the launch of the Mate 60 Pro smartphone, which is powered by a home-grown advanced processor, the Kirin 9000s. This was Huawei’s first 5G smartphone since US trade sanctions barred the firm from accessing advanced American technology.

Its devices unit, which includes the smartphone business, “surpassed expectations” in 2023, Hu said in the new year message, without elaborating on specific figures.

Huawei’s intelligent automotive solutions business, in which the company works with carmakers and supplies its own components and software, became more competitive in the past year, said Hu.

However, the business needs to generate more money. “Our Intelligent Automotive Solution business needs to keep working closely with partners to translate its technological advantages into business success,” Hu urged.

Huawei has been making a deeper push into the automotives sector and last month announced a new joint venture with Changan Automobile, a major state-owned carmaker, while also extending its invitation to other domestic carmakers to take an equity stake.

Huawei said it plans to transfer its smart-car system business to the new unit with investments from Changan. The firm’s car unit achieved 2.1 billion yuan in sales in 2022 and 1 billion yuan in revenue in the first half of this year.

Huawei’s nascent car business forms part of its efforts to reposition itself as a software and hardware provider to industrial and government clients.

Joining the artificial intelligence (AI) craze in China, Huawei unveiled the 3.0 version of its Pangu AI model in July, with a sharpened focus on industrial uses in various sectors including coal mines, finance and government. It has also touted in-house processors as alternatives to advanced American AI chips to satisfy the hunger for ChatGPT-style services in the country.

Huawei’s information and communications technology business, in which it supplies data centre servers and other tech infrastructure to clients, has remained solid, while its digital power and cloud businesses reported steady growth, according to Hu.

In the coming year, Hu said the company should sharpen its focus on the trend of digital, intelligent, and low-carbon transformation as its strategic direction. “In 2024, all business units should focus on creating value and growing the harvest,” Hu said.