Huawei Maintains Normal Operations Despite US Restrictions

Huawei Technologies Co. has posted three consecutive quarters of growth, declaring a return to normalcy after overcoming a host of US restrictions this year.
The company’s sales rose 7.2% to 191 billion yuan ($27.4 billion) in the December quarter, according to Bloomberg’s calculations. This was after the company carved out new income streams from areas such as smart cars and cloud services. In 2022, sales stood at 636.9 billion yuan, the Shenzhen-based company said, up marginally from a year earlier.
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Huawei is working to expand its reach into new markets and businesses after US tech export restrictions dealt a major blow to its smartphone business — which was briefly the world’s largest. These restrictions have prevented Huawei from selling its advanced gear in developed markets, and have also banned contract chipmakers from producing semiconductors designed by Huawei. This has effectively crippled Huawei’s HiSilicon design business.
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In an annual new year's message to employees, Rotating Chairman Eric Xu warned of macroeconomic uncertainty in 2023. He made no mention of China's abrupt reversal on Covid policy, which has spurred concerns about the fallout on economies from a subsequent surge in infections.
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But Xu said longer-term demand for technology remains intact. He didn’t specify how the company might overcome export restrictions, but Huawei has spent much of the past three years developing, researching and sourcing alternatives to American components. This work will help them to continue to meet customer demand even if they are unable to source American components in the future.
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"In 2022, we successfully pulled ourselves out of crisis mode," Xu said. "US restrictions are now our new normal, and we're back to business as usual.""The macro environment may be rife with uncertainty, but what we can be certain about is that digitalization and decarbonization are the way forward, and they're where future opportunities lie."
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Sales of the product are down from a 2020 peak, but they are climbing back up again.
Huawei has sought out alternative sources of income by selling patents, technology services and wireless gear to new customers from automakers to coal mines and industrial parks. It has also begun levying royalties from the world’s biggest smartphone brands, including Apple Inc. and Samsung Electronics Co.
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This year, the Chinese company has signed more than 20 patent license agreements, covering smartphones, connected vehicles, networking and the Internet of Things, according to Alan Fan, the company’s global head of IP. This is a significant increase from previous years, and shows the company’s commitment to protecting its intellectual property.
"We've managed to stay afloat because we've fought together as one united front," Xu wrote. "2023 will be the first year that we return to business as usual with external restrictions still in place."