Huawei confident of turnaround this year

Huawei Technologies Co will endeavor to turn 2023 into a period of fresh growth opportunities warranting a business-as-usual approach in spite of the US government restrictions, its executives and industry observers said.

The Chinese tech major, they believe, has succeeded in pulling itself out of a "crisis" by ensuring its revenue remained flat when it could have easily declined in 2022 due to a variety of odds.

That in itself is a sort of achievement, which seems to suggest the impact of Washington's restrictions on Huawei's sales has started to wane amid the Chinese company's progress in finding new growth streams, experts said.

This year, the global tech industry is expected to face challenges like weak demand, which might weigh on many companies' performance, they said.

Xu Zhijun, rotating chairman of Huawei, said in a letter to the employees that preliminary data showed that the company's revenue in 2022 was 636.9 billion yuan ($91.53 billion). The number is fractionally higher than the corresponding 2021 figure, yet marks a big turnaround from the nearly 30 percent year-on-year sales tumble in 2021 due to the US sanctions.

Xu said, "In 2022, we successfully pulled ourselves out of the crisis mode. US restrictions are now our new normal, and we're back to business as usual."

He did not divulge Huawei's profit figures. The company typically discloses its full annual results in the following year's first quarter.

According to Xu, looking to 2023, the macroeconomic environment may be rife with uncertainty, but what the company can be certain about is that digitalization and decarbonization are the way forward. The two fields embody future opportunities.

"We need to double down on our commitment to building the foundations of the digital economy and to driving green and sustainable development," Xu told Huawei staff members in his letter.

Specifically, Huawei will maintain heavy investment in research and development, ensure high-quality products and services in its output, leverage a diverse business portfolio, cultivate strong business resilience for growth, and press ahead with organizational transformation, Xu said.

Xiang Ligang, director-general of the Information Consumption Alliance, a telecom industry association, said ever since the US government placed tough restrictions on Huawei in 2019, the company had been working hard to reduce the negative impact on its revenues.

To that end, the company has been exploring new lines of business. Huawei's efforts include forays into smart car technologies, cloud computing, digital energy solutions and enterprise-oriented businesses. "These efforts have started to pay off," Xiang said.

According to Xu from Huawei, in 2022, the company's information communications technology infrastructure business maintained steady growth, and the decline in its device business has abated. Meanwhile, Huawei achieved rapid growth in its digital power and cloud computing businesses.

Data from the market research company Omdia showed that shipment of Huawei's smartphones reached 8.6 million units in the third quarter of 2022, up 48 percent year-on-year — a big reversal of the sales plunge in 2021.

Ma Jihua, a veteran tech industry analyst, said Huawei's 2022 revenue level still remained well below its record $122 billion in 2019, when the company was at its peak as the world's top Android smartphone maker.

"But Huawei started to bounce back," Ma said. "This year, however, the global tech industry is expected to face weak demand, which might affect its revenue."

Recently, global semiconductor companies such as Intel and Qualcomm, and electric carmaker Tesla, have all faced problems like high inventories.