BEIJING. Chinese technology giant Huawei announced on Friday that its revenue for the first half of 2023 increased by 3% compared to the same period last year. Despite facing sanctions that restrict its access to U.S. processor chips and other technology, the company managed to expand its profit margin.
Despite challenges imposed by U.S. restrictions that severely impacted its smartphone division, Huawei, China’s foremost global tech brand, has strategically shifted its focus towards selling network infrastructure to industries such as hospitals, ports, and electric car manufacturers. This shift is intended to reduce its vulnerability to sanctions.
Huawei Technologies Ltd. disclosed that its revenue in the six months ending in June reached 310.9 billion yuan ($43.1 billion), representing a growth of 3.1%. While specific profit figures were not provided, the company’s profit margin was reported to be 15%, equating to approximately 45 billion yuan ($6.5 billion). This marked an improvement over the 4.3% margin observed in the first quarter of the year.
The breakdown of sales figures revealed that the infrastructure unit generated sales of 167.2 billion yuan ($23.2 billion), while consumer sales accounted for 103.5 billion yuan ($14.3 billion). Additionally, the nascent automotive unit, responsible for supplying network and other technologies to the electric car sector, reported sales of 1 billion yuan ($138.6 billion).
Huawei encountered significant difficulties after former U.S. President Donald Trump imposed restrictions on its access to U.S. processor chips and technology, citing concerns about technology and security risks. U.S. officials alleged that the company could pose a security threat and potentially facilitate Chinese espionage, allegations that Huawei vehemently denies. In 2020, the company’s then-chairman, Eric Xu, stated that Huawei was operating under normal conditions despite the sanctions.
Renowned as the world’s largest manufacturer of network equipment for telecommunication and internet companies, Huawei divested its more budget-oriented Honor smartphone brand in 2020. Although it continues to offer smartphones under the Huawei brand, its primary focus has shifted to the domestic Chinese market due to a sharp decline in overseas sales.
Huawei’s financial report for 2022 indicated a 70% decrease in profits to 35.6 billion yuan ($5.2 billion), while sales experienced a marginal increase of 0.9% to 642.3 billion yuan ($93.5 billion).
Approximately half of Huawei’s extensive workforce, numbering 207,000 employees, is dedicated to research and development. The company has managed to devise alternatives for U.S. components, boasting breakthroughs in designing its own processor chips through proprietary tools.
Carlo Juancho FuntanillaFrontend Developer, WordPress, Shopify
Contributing Editor
AMA ACLC San Pablo
