According to TechHQ, an independent overseas technology news website, Huawei is building a semiconductor wafer network in China, as well as:
- 2022 and 2023 are two years for Huawei to find to make up for lost sales.
- Huawei may have found a way to circumvent the U.S. technology ban.
- Huawei appears to have signed a long-term patent deal to boost revenue.
After Washington imposed restrictions and stalled Huawei's business for several years, the Chinese tech giant finally emerged from the "crisis" in 2022. That year's gradual growth was enough to convince Eric Xu, Huawei's rotating chairman, that 2023 would be the "first year" to restore "business as usual" — even though U.S. export controls on high-end technology remain in effect.
Huawei may plan to return to the 5G smartphone industry by the end of this year
After being placed on Washington's trade blacklist in 2019, Huawei quickly lost its global and domestic consumer electronics market share. Counterpoint Research said that by 2022, Huawei will even use up Huawei's own internal chips. But Huawei has not slowed down, and is even constantly trying to develop new markets and new businesses.
At the end of last year, despite a nearly 70% drop in profits amid the twin challenges of sanctions and the pandemic, sales have picked up as Huawei seeks to go digital.
In the first six months of 2023, Huawei's total revenue rose 3.1 percent to 310.9 billion yuan ($43.1 billion), up from 0.8 percent in the first quarter and 0.9 percent in 2022.
Eric Xu, Vice Chairman and Current Rotating Chairman of Huawei
Huawei's performance shows that despite their sanctions from the United States, Huawei has gradually found a way to survive. Therefore, from research institutions and industry sources, the statement that Huawei will return to the 5G smartphone market in the second half of 2023 is true.
And there are more indicators to prove that Huawei will not be defeated in the face of the technical strike launched by the United States. After all, if Huawei can overcome the shackles of the US crackdown and relaunch 5G phones, the tech giant has the potential to return to the forefront of the global smartphone market.
On top of that, Huawei is re-entering the smartphone market, although the latest flagship devices lack 5G support. But data from Counterpoint Research shows that Huawei's smartphone sales in the first three months of 2023 increased by 41% year-on-year.
At the same time, Huawei made significant progress in a year with an operating rate of 6.2% in the first quarter of 2022. In addition, it is said that Huawei's foldable smartphones are currently the highest sales in China, accounting for more than 50% of the market share in the first half of this year alone.
Yu Chengdong, CEO of Huawei's consumer division and its automotive division, said at the time of the release of the Harmony operating system that Huawei's flagship smartphone is making a "comeback."
And according to research firm IDC, even in the second quarter of this year, with the launch of high-end mobile phones including the P60 series and foldable Mate X3 models, Huawei has re-emerged as the top five smartphone supplier in Chinese mainland.
According to IDC, Huawei shipped 14.3 million smartphones in China in the first half of 2023, an increase of nearly 40% compared to the same period last year. It is worth noting that the smartphone market is just one of many areas where Huawei has made progress since the US ban.
Huawei circumvents the US ban with a new source of revenue in 2023?
Huawei's improved performance so far is the result of its efforts to weather U.S. sanctions by reviving the company's mobile phone business and diversifying into new industries, including cloud computing and electric vehicles.
For example, in the first half of 2023, Huawei's smart car business revenue reached 1 billion yuan.
Chief Financial Officer Meng Wanzhou said that sales of cloud computing and digital electricity, which were 24.1 billion yuan and 24.2 billion yuan, respectively, achieved "strong growth". Huawei is also stepping up its efforts to serve enterprise customers, hoping to upgrade the operation of traditional services.
Last month, Huawei unveiled the third-generation Pangu model, joining a fierce AI race focused on industrial applications in coal mining, finance, and government sectors. Meng added: "Huawei has been investing heavily in foundational technologies to ride the trend of digitalization, intelligence, and decarbonization, with a focus on creating value for our customers and partners. ”
Huawei said that from January to June, the revenue of Huawei's information and communication technology business reached 167.2 billion yuan, which is Huawei's key business, including 5G network equipment. After being banned from telecommunications networks and restricted in several countries, Huawei is looking for ways to generate revenue.
Last week, Huawei and Ericsson agreed on a multi-year patent cross-licensing agreement for 5G and other technologies.
The plan is to develop patents and monetize Huawei to make up for lost sales and seek growth after being squeezed by Western sanctions.
Huawei announced on Friday that under the agreement, rival device makers can obtain patents necessary for each other's "3G, 4G and 5G cellular technologies" used in network infrastructure and consumer devices.
Huawei said it and the Swedish company had been granted a patent license, but it was the first long-term agreement between the two parties, without giving further details.
At present, Huawei is the world's largest 5G patent owner, owning 20% of the world's patents. In 2021, the company began charging smartphone makers royalties for using its patented 5G and other technologies.
The company revealed that the usage fee for 5G phones is capped at $2.50 per unit, a figure that is significantly lower than the industry average, according to legal experts interviewed by the Financial Times. Huawei's licensing revenue last year was $560 million, meaning it brought in more patent revenue than it paid other companies to use its patents the following year.
In 2023, Huawei's landing chip factory plan?
On August 25, the Semiconductor Industry Association (SIA) reportedly informed its members that Huawei had acquired two existing factories and was building three, and had received about $30 billion in government subsidies. As Bloomberg reports, this is "a shadow-making network that will allow the blacklisted company to evade U.S. sanctions and further advance the nation's technological ambitions." ”
Simply put, given Huawei's difficulty selling network equipment and the government's desire to produce more chips domestically, it makes sense for Huawei to move into chip manufacturing. The controversial telecommunications equipment maker, which is at the heart of U.S.-China tensions, began producing chips last year and received about $30 billion in state funding from the government and its hometown of Shenzhen, according to the Washington-based Semiconductor Industry Association.
Semiconductor Industry Association
According to the Bloomberg report, in the introduction of members of the semiconductor industry association, Huawei did not disclose its role in this expansion. In 2019, the U.S. Department of Commerce added Huawei to its Entity List, prohibiting it from working with U.S. companies in almost all cases.
"But if Huawei builds and buys facilities in the name of other companies, as the Semiconductor Industry Association claims, without disclosing its involvement, the telecom giant could circumvent those restrictions and indirectly buy U.S. chipmaking equipment and other prohibited supplies," the Bloomberg report reads. ”
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