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Despite US restrictions: Huawei continues as before

Chinese tech company says Washington's restrictions are 'the new normal'

•• 2 Min
Despite US restrictions: Huawei continues as before

Huawei has said it is doing "business as usual" years after Washington imposed punitive restrictions that created a template for broader export controls on technology shared with Chinese companies.

The Shenzhen-based tech giant said it forecast three straight quarters of growth and flat total revenue in 2022. Total sales are expected to reach Rmb 636.9 billion (US$91.8 billion) this year, up 0.02 percent annually.

"In 2022, we successfully emerged from crisis mode. US restrictions are now our new normal," said Eric Xu, Huawei chairman, in an annual New Year's message to workers.

Xu added that 2023 will be "the first year" in which we return to "business as usual," even though Washington's export controls on high-tech are still in place.

Huawei has been trying to enter new markets and business areas since the company was hit by the restrictions. The tightened controls forced companies supplying US technology to the Chinese group to apply for an additional license from regulators, limiting Huawei's ability to produce cutting-edge smartphones.

After Huawei was blacklisted by Washington in 2019, the company quickly lost its consumer electronics market share both globally and domestically. The company ran out of advanced homegrown chips this year, according to market research firm Counterpoint.

In October, the US introduced new technology export restrictions, further limiting Chinese access to its technology and part of a larger geopolitical confrontation between the world's superpowers.

To circumvent the measures, Huawei launched updated smartphone models that use stored chips and licensed components. Huawei expanded its consumer business into wearables like smartwatches, which require less advanced semiconductors than smartphones. The shift to wearables makes it easier for Huawei to source parts domestically.

Huawei is exploring alternatives to American technology, partnering with domestic companies and working with local governments, while Beijing works to become technologically independent.

Without giving details on how to overcome the shortage of advanced chips, Xu said the free fall in the consumer equipment business has eased and the company will focus its resources on product development next year.

Income from the expansion of cloud services and the stable telecom business offset falling equipment sales.

Another lucrative source of revenue for Huawei is collecting royalties, particularly in the area of 5G services, for some of the world's biggest brands, including Apple and Samsung.

The company also signed more than 20 patent licenses for smartphones and networks this year, said Alan Fan, the company's global head of intellectual property.

Xu acknowledged that business will still be difficult in 2023: "The macroeconomic environment may be fraught with uncertainty" and the company is "facing external fluctuations."

"We must work proactively to improve the business environment and manage risks more effectively. Only in this way can we achieve our business goals for 2023 and lay a solid foundation for Huawei's continued survival and development," said Xu.

Huawei5GSamsung

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