Huawei Technologies Co. posted its third straight quarter of growth, declaring a return to normalcy after overcoming a plethora 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 off annual figures, after carving out new income streams from areas such as smart cars and cloud services. 2022 sales stood at 636.9 billion yuan, the Shenzhen-based company said, up marginally from a year earlier.
Huawei is trying to open up new markets and businesses after US tech export restrictions gutted its smartphone business — briefly the world’s largest — and curtailed the sale of advanced gear in developed markets. Among those trade restrictions is a ban on contract chipmakers producing semiconductors designed by Huawei, effectively kneecapping its HiSilicon design business.
Rotating Chairman Eric Xu warned in an annual new year’s message to employees of macroeconomic uncertainty in 2023, though he made no mention of China’s abrupt reversal on Covid policy. That about-face has spurred concerns about the fallout on economies from a subsequent surge in infections.
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.
“In 2022, we successfully pulled ourselves out of crisis mode. US restrictions are now our new normal, and we’re back to business as usual,” Xu said. “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.”
Huawei’s also 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 began levying royalties from the world’s biggest smartphone brands, including Apple Inc. and Samsung Electronics Co.
The Chinese company has signed more than 20 patent license agreements this year, covering smartphones, connected vehicles, networking and the Internet of Things, according to Alan Fan, the company’s global head of IP.
“We’ve managed to keep our heads above the water because we fought together, united as one,” Xu wrote. “2023 will be the first year that we return to business as usual with external restrictions still in place.”
©2022 Bloomberg L.P.