Huawei is Samsung, but it may be more powerful than Samsung in the future?

Text/Wang Xinxi

Huawei is returning to its former peak.

At the Huawei Partner Conference 2024, Wang Tao, Executive Director of the Board of Directors and Chairman of the ICT Infrastructure Business Management Board, said in his keynote speech that in 2023, Huawei's operations will basically return to normal, with overall business stability and global sales revenue exceeding RMB 700 billion, achieving a growth rate of more than 9%. Among them, Huawei's enterprise business revenue in China has achieved a rapid growth of more than 25%.

Huawei's revenue at its peak was 891.4 billion, which then dropped to 630 billion, and now it is slowly rising to 700 billion.

From 2021 to 2023, R&D investment in these three years accounted for more than 20% of the company's revenue. In 2023, Huawei's total R&D investment ranked among the top five in the world.

One obvious trend is that Huawei is becoming Samsung

There is a feeling in the industry that Huawei is becoming more and more like Samsung.

We know that Samsung is a national enterprise in South Korea, and there are two things that Koreans cannot do without in their lives, that is, paying taxes and Samsung. Samsung Group is involved in many industries, including electronics industry, finance and trade, machinery and heavy industry, construction materials, petrochemicals, textiles and garments, advertising, logistics, medical and many other fields.

Samsung is involved in almost all sectors of South Korea's industrial sector, accounting for 16% of the country's GDP. According to the data, there are more than 85 subsidiaries under its name, of which three subsidiaries have entered the world's top 500, namely: Samsung Electronics, Samsung Life Insurance, and Samsung C&T Company ranked 15th, 426th, and 444th in the world's top 500 respectively.

It should be noted that Samsung Group is not listed as a whole, and the part listed is Samsung Electronics. Samsung Electronics includes a series of products such as mobile phones, TVs, PCs, and home appliances.

One of Samsung's characteristics is that it not only makes products, but also enters the supply chain and makes parts. It controls the design and manufacturing capabilities of core electronic components of mobile terminals such as processor chips, memory chips, and LCD screens, as well as the most upstream supply chain links such as CPU, NAND flash memory, DRAM memory, display, AMOLED panel, and camera.

Huawei exists as a mobile phone giant in the mobile phone industry, it relies on the supply chain of the industrial chain, but it relies on its own supply in the soul of mobile phones such as chips and operating systems.

In the automotive field, Huawei not only makes products, but also serves as a supplier, and is also benchmarked against Bosch, for example, in terms of motor and electronic control, Huawei can also supply. At present, Huawei's sales of motor products have surpassed that of Inovance.

Huawei's car BU provides services such as intelligent driving, intelligent cockpit, digital platform, intelligent vehicle cloud, AR-HUD, and intelligent vehicle lighting.

In addition, from the perspective of the magnificent and diversified business layout, Huawei is also becoming more and more like Samsung.

Huawei has a presence in communications, enterprise services, cloud services, mobile phones, automobiles, consumer electronics, chip design and manufacturing, servers, and artificial intelligence, and represents the top technology level in China in many fields such as communications, artificial intelligence, intelligent driving, 5G, chips, and operating systems.

These represent the top level of technology in China, which can be used in mobile phones, PCs, and automobiles, and many business lines form revenue and profit and feed each other. And the fields of mobile phones, automobiles, and PCs can be integrated with each other to form a unique competitiveness that no one else has, which is what other manufacturers are afraid of.

For example, Huawei has its own mobile phone and operating system, so it doesn't have to worry about the mobile phone being in the hands of others, and it has a stronger dominance over the car machine business.

The reason why Samsung can be the first in many fields is also that the technology and supply chain in many fields can be shared, forming a continuously expanding technology and brand influence. For example, the supply chain of Samsung mobile phones can form brand and technical radiation capabilities for products in the fields of PCs and TVs, reduce the cost of parts, give priority to the most advanced technology to their own products, and form the competitiveness of product hardware.

But from the current point of view, although Huawei is in Samsung, Samsung is better at making electronic products. Huawei has cut into the underlying business of the technology and communications industry, and has moved the cake of many international giants.

From the very beginning, Huawei has been in the traditional business of cloud pipe, and in almost all of its main channel businesses, Huawei has met with international giants in a narrow way. Huawei faces IBM and HP in the server field, Ericsson is the opponent in the wireless field, and Huawei faces Cisco in data communication products. The opponent of Huawei's HiSilicon chip business is Qualcomm, but Huawei has not been knocked down by these giants, survived, and is getting bigger and bigger.

Later, Huawei singled out Google on the mobile operating system, and the number of HarmonyOS ecological devices has reached 800 million, 2.2 million developers, and more than 350 software and hardware products, and the ecosystem has gradually become the world's third largest operating system.

With Huawei's in-depth layout in the automotive field today, it is facing Tesla in the field of autonomous driving. Judging from the intelligent driving potential of the M7 and M9 products, Huawei still has a lot of room for growth in the field of autonomous driving.

Huawei has singled out Qualcomm and MediaTek in the chip field in the past, and will face Nvidia in the future.

Some time ago, Nvidia took a look at its main competitors and found that Huawei is its competitor in four of its five layouts, including AI-related graphics processors, large cloud service companies with in-house teams to design AI-related chips, Arm-based CPU and network products. Therefore, Huawei is listed as a major competitor in several categories such as AI chips.

In fact, Yang Chaobin, Director of the Board of Directors and President of ICT Products & Solutions, pointed out that Huawei's goal is to provide the world with a second choice of computing power. In Huawei's view, by 2028, it is expected that ARM servers will account for more than 80% in China and more than 50% in the world.

In addition, Huawei is also competing with Oracle and Microsoft in databases, and Huawei's Kunpeng series of server and database products have been widely used.

Every time Huawei cuts into a field, opponents are afraid of him, in comparison, Samsung is relatively mild, and it also cuts into many fields, but Samsung does not let competitors in technology and products like a big enemy, but Huawei has this deterrent.

In general, Huawei is in Samsung, but the fundamental difference between the two lies in the difference in the corporate mechanism, behind Samsung is chaebol capital, behind Huawei is the joint shareholding of employees, and the motivation for struggle is different. In addition, in the pursuit of enterprises, Samsung Electronics is more to achieve the largest market share for the pursuit, in the perspective of technological breakthroughs, innovation and competition capabilities that represent the commanding heights of science and technology in the future, Samsung's determination is not as good as Huawei.

Epilogue:

Huawei and Samsung are typical representative enterprises in China and South Korea, and both have invested heavily in basic disciplines and underlying R&D and infrastructure fields such as chips. According to the data at the end of September 2021, the market capitalization of Huawei and Samsung is about $220 billion and Samsung is about $450 billion, respectively, but from today's point of view, Huawei's market value may have already exceeded $300 billion.

However, in comparison, Samsung has very strong technical strength in the field of traditional digital technology such as semiconductors, displays, cameras, and smartphones, but at present, Huawei is rebounding from the trough and returning to the peak.

Samsung's core competitiveness at the technical level is still concentrated in the field of smart phones, and there is a lack of obvious bright spots at the emerging business level, and in the field of new energy vehicles, although it has announced the development of solid-state batteries, Samsung lacks an obvious comprehensive layout and competitiveness of the automotive industry. This may be a significant difference between Huawei and Samsung in the future business.

Comparatively speaking, Samsung's overall strength may be a little stronger, but in the past two years, it is obvious that Huawei's rise is too fast, especially Huawei's strong rise in the automotive business, Samsung's core competitiveness at the technical level is still concentrated in the field of smart phones, from the trend point of view, Samsung's momentum is downward, and Huawei is on the rise, from the perspective of future potential, Huawei will live better and better, may be stronger than Samsung, we wait and see.

Author: Wang Xinxi, Senior Reviewer of TMT This article is not reproduced without permission