Huawei posts rebound in sales for 2023, driven by popularity of Mate 60 phones

Huawei Technologies reported a rebound in sales growth for 2023, driven by its comeback in the high-end 5G smartphone segment with the popular Mate 60 series, as the sanctions-hit company faces further US scrutiny for the chip breakthrough that powered its resurgence.

The privately held firm recorded a 9.63 per cent increase in revenue to 704.2 billion yuan (US$97 billion) in 2023, Huawei said in its annual report released on Friday.

Net profit for the year was 87 billion yuan, up 144.5 per cent year on year, partly thanks to recurring gains from its sale of budget smartphone unit Honor and other assets. Profit margin was 12.35 per cent in 2023, compared to a historical low of 5.5 per cent in 2022.

Sales from Huawei’s consumer business, which includes its popular flagship 5G smartphones and its co-developed Aito electric cars, recorded a 17.3 per cent increase to 251.5 billion yuan in 2023, being one of the strongest segments.

US said to weigh sanctions against Huawei’s secretive chip supply network

It was the first growth posted for the consumer business since 2021, after the US government tightened its restrictions against Huawei’s access to advanced semiconductors developed or produced using US technology, effectively crippling its smartphone business.

Last August, Huawei staged a surprise comeback with the Mate 60 Pro smartphone, powered by a home-grown advanced processor, the Kirin 9000s. This was Huawei’s first 5G smartphone since tightened US trade sanctions in 2020, and its release fuelled a wave of patriotic fervour among Chinese consumers that boosted domestic sales.

While Huawei is private, it has voluntarily disclosed key financial data since 2000. However, company executives skipped this year’s annual results press conference.

It has been a company tradition for top executives to take journalists’ questions after announcing results, starting as far back as 2013, and including a virtual event in 2020 during the pandemic.

“The company’s performance in 2023 was in line with forecast,” Ken Hu Houkun, Huawei’s rotating chairman, said in a statement. “We’ve been through a lot over the past few years. But through one challenge after another, we’ve managed to grow.”

This year, Huawei will keep investing in technology and open innovation to help different industries modernise, the company said in the statement.

Huawei’s low profile comes after its mysterious Kirin 9000s processor invited closer scrutiny from Washington, which is reportedly targeting the company’s chip supply chain, including top Chinese foundry Semiconductor Manufacturing International Corp. The US Bureau of Industry and Security said in September that it is probing the “purported” 7-nanometre chip that powered the Mate 60 5G smartphones.

However, Huawei is not backing away from further advances in the smartphone industry. The company said it will resume its pace of launching flagship smartphones, which include the Mate series and P series.

Huawei’s recovery also came amid efforts to diversify its revenue sources by venturing into new areas such as smart car systems. Revenue for its intelligent automotive solutions business, in which the company works with carmakers and supplies its own components and software, grew 128 per cent to 4.7 billion yuan in 2023, compared to 2.1 billion yuan in 2022, according to the company.

Huawei has been making a deeper push into the automotive sector, and last year announced a joint venture with Changan Automobile, a major state-owned carmaker, while also extending its invitation to other domestic carmakers to take an equity stake. Huawei said it plans to transfer its smart-car system business to the new unit with investment from Changan.

Huawei injects fresh capital into investment subsidiary as growth resumes

The company’s information and communications technology infrastructure business, which includes the buildout of 5G networks and data centres for carriers and enterprises, reported sales of 362 billion yuan for a 2.3 per cent growth, as the company expects to benefit from the digital transformation of traditional industries and upgrades to 5G-Advanced networks.

Huawei expects 2024 to see the first commercial use of 5G-Advanced, which promises speeds of 10 gigabits per second on 5.5G networks, up from the current 1Gbps, enabling the adoption of connected cars and generative artificial intelligence.

The cloud computing business was one of the fastest-growing industry segments for Huawei in 2023, up 22 per cent year on year to 55.3 billion yuan in revenue. Its digital power business, in which Huawei helps customers transform to greener energy, grew 3.5 per cent to 52.6 billion yuan in sales.

Huawei said its research and development expenses in 2023 reached a record high of 164.7 billion yuan, compared with 161.5 billion yuan the previous year.