Huawei Analyst Conference Q&A Full Record: Huawei will not build its own chip factory

Huawei Rotating Chairman Hu Houkun

On April 26, Huawei's annual analyst conference was officially opened, which is not only the best window for the outside world to observe Huawei's strategy, but also Huawei's management will respond to hot issues such as business strategy, and the Q&A session often better reflects Huawei's views on the current situation.

Speaking of Huawei's goal of "surviving with quality" proposed by Huawei this year, Hu Houkun, rotating chairman of Huawei, said that Huawei has invested more resources in customer satisfaction management than in the past, and has voluntarily abandoned some low-quality trade fairs, and if the business unit cannot achieve quality development, it will face the risk of closure.

Speaking of the cloud business, he mentioned that "we are still satisfied with the rapid growth in the past two years", but at the same time, Huawei is also soberly aware that Huawei's cloud business is still in the stage of trying to climb the slope. Compared with the world's leading cloud service providers or even in China, the gap needs to be narrowed in terms of market share and the competitiveness of cloud service providers' products.

When it comes to the consumer business, Hu Houkun believes that although there has been a big decline in mobile phones, Huawei can use a new perspective to see the terminal business. In fact, the business of the terminal is not only the mobile phone, we now propose the hardware "1+8+N" plus software ecology to build a full-scenario, intelligent experience, which has become a clear strategy for terminal services.

When it comes to the automotive business, Hu Houkun made it clear that this year, whether it is through Huawei's smart selection model or HUAWEI Inside model, partners have new models released.

Talking about the hot topic metaverse, Hu Houkun bluntly said that from a global point of view, the metacosm should still be in a hype period, and any new technical concept will go through such a stage in the introduction of the market. The essence of the metaverse is fusion, and its value is not only on the To C side, but also on the To B side.

Talking about the chip problem, Hu Houkun replied that although Huawei is now facing the problem of chip shortage, there is currently no self-built chip factory, and Huawei believes that the industrial division of labor is necessary.

Zhou Hong, President of Huawei Strategic Research Institute

Retreat: Four scientific hypotheses

The analyst conference has both a long-term plan of "retreat" and a "pragmatic" current strategy, and Zhou Hong, president of Huawei's Strategic Research Institute, took the stage first to expound the former.

Zhou Hong mentioned in her speech: "Many of the existing theories and technologies were proposed decades ago or even more than a hundred years ago, and the application of these theories and technologies has begun to encounter bottlenecks, such as Nyquist sampling theorem and Shannon's law in the field of communication, computability theory in the field of computing and von Neumann's architecture, Moore's law in the field of semiconductors, etc., hoping to have new assumptions and visions to drive breakthroughs." ”

To this end, Huawei puts forward four scientific assumptions for the future: first, expand the boundaries of cognition, matter and energy, phenomena and laws; second: expand the limits of perception to better understand the world and human beings themselves; third: explore new computing models and implementation methods, recognize the world, and solve problems; fourth: break through the assumption of Shannon's law and develop information communication in a larger time and space.

Frankly speaking, these are not the foundations necessary for a commercial private enterprise to establish itself, but more like topics to be discussed in academia. In 2019, Huawei said that the establishment of the Institute of Strategic Studies is to strengthen Huawei-based research, be responsible for cutting-edge technologies for more than 5 years, and support the academic community to carry out research on basic science, basic technologies, and technological innovations, which is an important part of Huawei's technology system.

Hu Houkun also said, "At Huawei, when it comes to innovation, the first thing we think of is top talents. We hope to attract world-class talents with world-class problems to meet challenges together and promote scientific and technological progress. ”

At the same time, he said, "Huawei is once again recruiting talented teenagers around the world, regardless of nationality, major, or college, as long as they have dreams for the future and believe that they have the ability, they will boldly join Huawei." Huawei offers the world's most difficult subjects, a powerful platform, and enough resources to support geniuses to explore. ”

It is worth mentioning that this is Zhou Hong's first public appearance as the president of Huawei's Strategic Research Institute. Titanium Media App learned that Huawei announced the appointment in March this year, and Xu Wenwei no longer serves as the president of Huawei's Strategic Research Institute and remains a director of the company. Zhou Hong has served as the president of Huawei's European Research Institute and the CTO of the wireless network product line.

Pragmatic: digitalization and low carbonization

"At present, what we have to do is to continue to strengthen our innovation capabilities and firmly seize the two major opportunities of digitalization, intelligent development and low-carbon development of human society."

If Zhou Hong talks about how Huawei views the future, Hu Houkun, Huawei's rotating chairman, is responsible for expressing how Huawei will move towards the future. "No one doubts whether digitalization should be done or not, and everyone is more concerned about how digitalization is done," Hu Houkun mentioned.

At the digital level, different enterprises, different industries, in the process of digitalization, in different stages, such as information and communication and financial industry, digital transformation is relatively early, digitalization has entered the core production system; power, oil and gas, manufacturing and other industries, are also promoting digitalization to solve the problem of production scenarios; and real estate, construction, agriculture and other industries, just began the digital process.

It is precisely because the digitalization process is different, the challenges faced by enterprises are also different, such as "the choice of technology is more difficult", "the scene is very complex, the technology can not match", and the worry is "large investment, no output", for many enterprises, the cloud is still a big challenge.

Huawei believes that first of all, we must adapt products to more scenarios, and customers often need a combination of products that are easy to deploy, easy to install, and prefabricated to reduce the difficulty of digital transformation in different scenarios. Huawei takes one more step forward and does a good job of pre-integration and pre-verification of products in advance.

It is understood that Huawei launched more than 20 new product portfolio solutions for finance, education, medical care, energy and other industries last year, improving the efficiency of installation, maintenance and management of customers and partners.

The cloud is the key to digitalization, and the doubts of all walks of life in the face of cloud computing can be summarized into three categories: unwilling to go up, will not go up, and use it badly.

"Unwilling to go up", enterprises are often worried about data security, enterprises can put the system with high requirements for resource resiliency to the public cloud, and the business with high data security requirements can be placed in the local dedicated cloud.

"Will not go up", for example, enterprises do not know which applications can go to the cloud, how should they go? In this regard, Huawei has established a dedicated consulting service team to help customers plan for the cloud, open a digital transformation special class for customers, and provide a full range of services.

"It is not good to use", for example, enterprises do not know how to combine AI capabilities and business scenarios, and lack experts and training data to quickly develop AI applications. Huawei opens ai, big data, audio and video technologies, as well as integrated development tools, on the cloud, and provides corresponding consulting services to help customers make good use of these technologies and resources.

HUAWEI CLOUD previously proposed the "everything is service" strategy, cloudifying and servitizing infrastructure, technology, and experience, so that it is no longer difficult for customers from all walks of life to go to the cloud.

Hu Houkun also announced metaStudio, a digital content production line on the cloud, for the HUAWEI CLOUD platform. MetaStudio moves the whole process of editing, modeling, synthesis and other aspects of film and television production to the cloud, so that film and television creators can seamlessly collaborate in different places, greatly improving production efficiency, and the content production cycle of a blockbuster movie can be shortened from a few years to several months.

Regarding the hotly discussed changes in Huawei's legion, Hu Houkun said that in the practice of helping customers digitally transform, Huawei found that customer problems and Huawei's technology could not be well matched. On the one hand, existing technologies cannot meet the needs of customers, on the other hand, even if some technology customers want to use, but there is no way to effectively combine them to form a solution.

"Legion, in fact, is an integrated team, not only sales, but also requirements management, industry solution development, ecological cooperation and services, etc., these resources, characterized by the fact that each team is specific to a specific industry, can deeply understand the needs of customers." He said.

Through this new organizational operation model, Huawei shortens the management chain vertically, allows product development to better respond to customer needs, and rapidly integrates resources horizontally, identifies key business scenarios, and integrates huawei and partner products and capabilities to form targeted solutions. At present, Huawei has established industry corps such as coal mines, customs ports, smart highways, power digitalization, and airport tracks.

At the level of low carbon, Huawei mainly focuses on two aspects, one is the energy supply side and the other is the energy consumption side. First, efforts should be made to increase the proportion of renewable energy in energy on the energy supply side. Specifically, it is to make full use of digital technology to change the technical route of the photovoltaic industry and improve the efficiency of power generation and operation and maintenance.

Secondly, on the energy side, ICT technology can help all walks of life to significantly reduce energy consumption and carbon emissions, and the ICT industry itself is also on the road of energy conservation and emission reduction. Huawei's wireless sites use minimalist design concepts, maximize the use of renewable energy, and intelligent technologies to create a systematic solution, and the data center meets the challenges of data center energy consumption through innovative technologies such as full liquid cooling, AI management, prefabricated modules, and cluster computing.

The following is the Q&A transcript of the "2022 Huawei Analyst Conference", edited by Titanium Media:

This year, Huawei put forward the goal of "surviving with quality", in order to achieve this goal, what areas will it focus on? What do you think is the biggest problem you are facing right now?

Hu Houkun: This year, our entire company's business policy is indeed centered on "letting the company live with quality". As can be seen from last year's operating data, the difficulties faced in the past have not decreased this year, and changes in the external environment have brought more difficulties, such as geopolitical conflicts, the global epidemic has not disappeared, global inflation is coming, commodity prices are rising, exchange rate fluctuations may occur... These are the serious challenges encountered this year in the operating environment.

In this case, Huawei believes that we must first survive, but we must improve the quality of survival. There are a few perspectives to share with you:

The first "quality of life" is that Huawei wants to ensure the quality of the products and solutions it provides to its customers. The competitiveness of products and solutions cannot be reduced, and the continuity of services cannot be problematic, and Huawei will take a lot of measures in this regard. In recent years, we have invested more resources in customer satisfaction management than in the past, in fact, customers also have difficulties, and Huawei needs to work with customers to find difficulties and solve problems at any time.

The second "quality of life" is reflected in Huawei's steady operation. As an enterprise, everything is empty, no matter how beautiful our imagination of the future is, nor how great the management is, Huawei must first achieve stable operation to survive. Here are a few points to pay special attention to:

1, the entire company should pay special attention to the quality of the transaction. We have to manage the quality of our transactions, and we will give up on some low-quality transactions.

2. Huawei's current business portfolio is more diversified than in the past. We require each business itself to focus and achieve quality development, and if it cannot achieve quality development, it will eventually face being shut down.

The third "quality of life". Facing the future, we will continue to invest in innovation. We will continue to invest in talent, provide sufficient funds and resources to ensure that we optimize the innovation path, and through these measures, we can make our investment today more qualitative in future development.

The speech highlighted the HUAWEI CLOUD business, and we also clearly saw the growth of HUAWEI CLOUD business from last year's annual report, and wanted to know what the next layout and direction of this business is.

Hu Houkun: Regarding HUAWEI CLOUD, first of all, for this business, we are still satisfied with the rapid growth of the past two years. On the one hand, its market share, such as the IaaS market share, currently HUAWEI CLOUD ranks second in China and fifth in the world, which has made significant progress compared with the past few years.

On the other hand, we believe that a very important foundation for the business development of the cloud is the development of the ecosystem. In the past few years, the HUAWEI CLOUD ecosystem has also made great progress, for example, in the global HUAWEI CLOUD has gathered more than 30,000 partners, there are now more than 2.6 million developers around HUAWEI CLOUD to do application development, and more than 6,000 applications have been listed on the cloud market.

But at the same time, we must also be soberly aware that Huawei is still in the stage of trying to climb the slope in the cloud business. Compared with the world's leading cloud service providers, or even the domestic leading cloud service providers, we still need to narrow the gap in terms of market share and the competitiveness of cloud service providers' products.

This year, our cloud services team proposed the concept of "everything is service": infrastructure as a service, technology as a service and experience as a service, and we believe that their business strategy should be in the right direction. Taking the Chinese market as an example, we believe that a big change is now taking place in the country, that is, the digitization of thousands of industries is advancing at a speed faster than we imagined. The digitization of thousands of industries has actually brought very good development opportunities for the development of cloud business, especially public cloud business.

Since large and small enterprises have to do digital transformation, so everyone's acceptance of cloud services is much greater than in the past, which means that we don't need to spend so much time to persuade customers how good the cloud is, everyone knows that the cloud is good. Now that everyone's needs are deeper and clearer, the next question is how to get to the cloud, how to use the cloud well, and the customers who generate these needs are often manufacturing enterprises or transportation companies like Huawei, which is what we usually call "traditional industries".

The application scenarios of these enterprises are different, and the production mode of each enterprise is different, so to help them get to the cloud and use the cloud well, they need very strong service capabilities, and this service capability is precisely Huawei's strength. Because everyone knows: First, Huawei itself has gone through the road of digital transformation for so many years, we are also using the cloud, we are also going to the cloud, we know where the difficulties are here. Again, Huawei has been doing To B business, doing more than thirty years, we know how to do To B business, our organization has been perfected, our capabilities have been built after so many years, so our HUAWEI CLOUD team is very keenly aware of such changes, this year put forward the concept of "everything is service", we think it is appropriate.

What is the prospect of Huawei's consumer business? In view of the gap in the decline of consumer business, what strategy will Huawei use next to make up for it?

Hu Houkun: Our mobile phone business has declined significantly in the past two years, and for a company, no matter how big the challenge is, we always have to learn to manage this crisis. And crisis is both a threat and an opportunity. In the terminal business, although there has been a great decline in mobile phones, we can look at the terminal business with a new perspective. We found that the business of the terminal is not only the mobile phone, we now propose the hardware "1 +8 + N" plus software ecology to build a full-scene, intelligent experience, it has become a clear strategy for terminal business.

In the last year, our strategy initially worked. On the one hand, our "+8 products", such as wearables, watches, bracelets, as well as our speakers, smart screens, tablets, these devices have a good increase in shipments.

On the other hand, in terms of software ecology, our Hongmeng ecosystem has also developed well, and Huawei devices equipped with HarmonyOS have exceeded 220 million. Hongmeng Zhilian already has more than 1900 ecological partners. In addition, in 2021, the shipment volume of our new ecological equipment exceeded 100 million units. All of this makes us full of confidence in the future development of Hongmeng Ecology.

We have expanded the strategy of hardware plus software ecology to five major scenarios to create an intelligent user experience, including smart office, sports and health, smart home, smart travel, and audio-visual entertainment. Therefore, you can expect that in the future, we will continue to see us launch more excellent products, and we will also experience Huawei and our ecological partners to present more and better intelligent services to everyone.

How is Huawei's smart car business developing so far? Is it possible that the sales target of the previous online transmission will be completed this year? Will new cars be released this year?

Hu Houkun: The car is a question that everyone can't get around in everyone's attention to Huawei, first answer your last question about whether there will be a new car release this year, I want to say that there will definitely be, whether it is through huawei's smart selection mode or HUAWEI Inside mode, our partners have new models released, so stay tuned!

In addition, you just asked whether the sales target of Huawei's smart car this year can be achieved, in fact, this question does not need me to answer, Yu Chengdong has already answered. Of course, I think that the goals proposed by Huawei, even if they cannot be achieved, I hope that everyone can have more tolerance and understanding. Because after all, we are engaged in the car-related industry or a newcomer, we have to learn a lot of things, and may even make mistakes, which is inevitable, I hope you will be more tolerant.

I also want to report the latest situation of Huawei's current car business in combination with your question, which is also of concern to everyone. First of all, after so many years of groping, we now have a clearer understanding of the smart car parts business, the trends in our market and our opportunities. The so-called industry trend, we have seen more and more clearly, the automotive industry or travel industry it has indeed come to a key time inflection point, everyone often says the "four modernizations": electrification, intelligence, networking, sharing, in fact, has become a clearer and clearer future direction. Behind this "four modernizations" means that such a huge industry as automobiles, or a more huge industry such as travel, is entering a period of transformation, and in the process of this transformation, there is no doubt that digital technology and power electronics technology are definitely key enabling technologies.

Therefore, whether Huawei is in ICT technology or power electronics technology, we have accumulated a lot of technological innovation in the past three decades, such as network, computing, operating system, cloud, power electronics We have a lot of accumulation, so we call heroes useful. These technologies that we have accumulated in the past and are doing now will certainly be able to create value in the transformation process of the entire automotive industry in the future. Based on this understanding, we have further clarified how Huawei will develop in the future of this industry and what our strategy is, which is also familiar to everyone. Huawei does not build cars, our positioning is the supplier of smart car components, what we have to do is to gather our ICT capabilities, based on several key solutions, to help car companies, including traditional car companies, including new car manufacturers, to help them build good cars. At the same time, we are also fully open to the consumer-facing channels that we have formed over the past few years, which can help car companies that are willing to cooperate with us to sell good cars. Therefore, our positioning and strategy are also more clear.

Based on this positioning and business strategy, we will do a few things well, and here we will report to you. First, we focus on several key subsystems to create competitive solutions, including intelligent electric, intelligent driving, intelligent cockpit, intelligent networking, and intelligent vehicle cloud services. Based on such a solution, the second key work we have to do is to openly cooperate with the upstream and downstream partners of the industrial chain. For example, we are based on an open intelligent car digital platform, an autonomous driving platform, and a smart cockpit platform based on HarmonyOS to cooperate with partners in the upstream and downstream of the industry chain. At present, we have cooperated with more than 300 companies. On the other hand, we are also actively cooperating with automakers (including traditional automakers and new car manufacturers) in different ways, including cooperation at the subsystem level or at the specific component level, as well as more in-depth cooperation based on the HUAWEIInside model. And, of course, there's Huawei Smart. Therefore, you can see that now we are deeply cooperating with us, such as BAIC Polar Fox, Avita, GAC, and Xiaokang Xilis, all of which have gradually released or listed new models. We also believe that with the gradual development of the smart electric vehicle market, our positioning and choice of models will also be understood and recognized by more and more upstream and downstream partners.

Now that many companies have released products and solutions in the field of metacosm, how does Huawei understand the topic of metacosm? Will we have a presence in the relevant product and solution areas?

Hu Houkun: The metaverse is indeed a very hot topic, but it is also a particularly big topic. It has a lot to discuss, and today, due to time, I can only pick a direction that I may have a little understanding of myself to exchange views with you. First of all, from a global point of view, the metacosm should still be in a period of hype, of course, this is also very normal, any new technical concept, etc., will go through such a stage when it is introduced to the market. Huawei is a technology company, for us, the more in this lively hype stage we have to be calm, what we have to do is to try to grasp the essence behind it as much as possible through the current hustle and bustle. By grasping these essences, we are better prepared.

If I talk about the nature of the metacosm, I also have a few immature views. First, I think the essence of the metacosm is fusion, and this fusion means the fusion of the physical and digital worlds. This convergence also means the digitization of the physical world and the realization of the digital world. This kind of integration is of practical significance, such as the digitization of the physical world, we through 3D modeling simulation, digital twins, virtual and real fusion and other technologies, in fact, it is possible to help us find the optimization of the physical world in the digital world. In addition, in the digital world, in a lower cost and more efficient way, we can optimize the operation of the physical world, for example, we can imagine the simulation training of autonomous driving in the future, the simulation of smart factories and the digital twins of smart cities, which may be the embodiment of such a fusion method.

Second, the future value of the metaverse is not only on the To C side, the value on the To B side is likely to be even greater. Especially at the moment, when people talk about the metaverse, they are basically talking about some applications of To C such as games and education. I personally believe that the value of the future development of the metaverse on the To B side should be given enough attention. When it comes to Huawei's technology strategy, I think it may be too early to say a complete strategy, but for a technology company like us, we need to calmly judge its future development and prepare step by step. And I believe that because Huawei focuses on a relatively wide range of technologies, the metaverse may have a lot of things we can do in the future, whether from connection, to computing, to the cloud, and even to the terminal, this aspect is a technical expert, and I also asked him to talk about his views on the metaverse.

Wang Tao, Managing Director of Huawei and Director of the ICT Infrastructure Business Management Committee: As Mr. Hu said, the metacosm is likely to be still in the hype period of the industry, and I can't talk about being an expert in this area, but let me talk about it, Huawei's various industries can now work together with the industry to jointly promote the construction of a real, immersive, interactive virtual digital world, around the metacosm Huawei industry in all aspects of the layout, simply to give you a report.

Generally speaking, the metaverse that everyone says may involve a seven-layer model, but in fact, this seven-layer model includes infrastructure, terminals, decentralized services, as well as spatial computing, creation platforms, application platforms and content. For Huawei, Huawei is making our contribution to the development of the metacosm around the ICT infrastructure, cloud services and intelligent terminals that we have long focused on.

First of all, at the infrastructure layer, the development of the metaverse requires the full integration of the digital world and the physical world, so that it will put forward higher requirements for the delay of real-time interaction and the uplink and downstream bandwidth of communication, and a large number of renderings also require greater computing power and more diversified computing power. For example, we propose to define 5.5G, and redefine the computing architecture, etc., to some extent, to prepare for the arrival of the metaverse. At the terminal level, Huawei mainly conducts research and development and investment in mobile phones, glasses, wearable devices, including haptic devices, and other aspects. For example, we have built XR hardware, as well as solutions such as 3D spatial audio and video, as well as river maps for city-level AR scenes, which have made great progress. In the application and creation platform, we are mainly based on HUAWEI CLOUD planning and layout, just now Mr. Hu mentioned HUAWEI CLOUD MetaStudio in his speech, in fact, it is to build a digital content production line, for the digital world to continuously create more creative content, which is also a good solution for us to support the development of the meta-universe in the future.

In any case, the metaverse is still in the early stage of development, Huawei will actively prepare for the accumulation of technology in all aspects, we are willing to explore with the upstream and downstream of the industry to find out how the metacosm can better serve the various scenarios of whether it is To C or To B, and we also look forward to bringing more contributions and value to our lives and work in the future.

In order to solve the problem of chip supply chain, does Huawei have its own chip factory? Are there any long-term plans for the future of chip supply security? Can Huawei's recent patented 3D stacking technology ease the pressure of facing U.S. sanctions?

Hu Houkun: First of all, although Huawei is now facing a shortage of chips, we are not building our own chip factory at present, and we still believe that the division of labor in the industry has its requirements.

Wang Tao: The problem of chips may not have been a problem in the past, but in recent years, due to geopolitical competition and the epidemic, the global unified industrial chain on which we originally lived has been broken. In the past, the public did not need to pay attention to chips at all, and now it has become a problem that the general public is worried about. However, what we see is a chip, the industrial chain behind it is very long, it involves chip design, manufacturing, packaging, testing and other links, in order to support these links, the upstream also involves equipment, machines, materials and other longer chains, in such a long chain, any company in the world, including Huawei, can not solve this problem by themselves.

Therefore, the problem of chips to be completely solved, the whole industry chain upstream and downstream of the joint efforts. And to a certain extent, we can only better solve this problem by relying on a globally unified supply chain. If for one reason or another, one-sided decoupling and splitting may not be conducive to the development of our global ICT industry, which will only cause industrial regression and cost increase, and there has been a global "lack of core" and a sharp rise in prices, and finally these costs will be passed on to consumers. But on the other hand, in fact, we also see that it may also bring some positive impact, in recent years, due to the shortage of chips, so that various countries around the world, including China, have increased investment in various chains of semiconductor manufacturing. We have also seen that whether in China or in many regions abroad, everyone's ability in all aspects of the semiconductor manufacturing chain has been improved, production capacity has also been improved, and the localization production line has also made rapid breakthroughs. We believe that the shortage of chips throughout the supply chain may be alleviated within a few years, and we also look forward to the success of these companies, and naturally Huawei's problem will be solved."

But I also understand that recently some friends, customers, and partners have paid attention to Huawei and supported Huawei, worrying about whether Huawei's products will lag behind in this situation. As Mr. Hu just introduced, I am responsible for product research and development and R&D investment management in the ICT field. I can tell our customers and our partners with more certainty, in fact, Huawei's innovation is three-dimensional, all-round, in other words, Huawei is using the method of system engineering to develop products, in the recent annual report conference Guo mentioned that Huawei uses a variety of ways to achieve the reconstruction of basic theory, software reconstruction, hardware reconstruction, we design a product, often from the system architecture, algorithms, software, optical devices, RF technology and other aspects to reconstruct a leading product, Therefore, we are confident that we will continue to maintain the leading position of our main products in the coming years and continue to create value for our customers.

Specific to Huawei's patented 3D stacking technology, the patent was applied for by Huawei in 2019, the technology involved is more common in the industry, Huawei has many years of accumulation in this regard, we are based on chip 3D stacking, 3D packaging or called chiplet technology, to achieve the most advanced chip or system in the case of the process is relatively not so leading. Of course, we have accumulated a lot of technology and innovation, so we are confident that we will always provide leading products and solutions to serve our customers and partners.

(This article was first published on the Titanium Media App article |.) Shuai Zhang, Editor | Gaieunda)