China’s Huawei says ‘out of crisis’ mode as revenue edges up

China’s Huawei Technologies Co Ltd has stated that it believes it is now “out of crisis mode” as it announced a small increase in annual revenue. The company is making progress in replacing components affected by sanctions after investing billions of dollars in research. Huawei’s revenue rose 0.9%, as anticipated by the company, and this indicates some level of stability after undergoing several rounds of US export controls since 2019, which badly affected its once-mighty smartphone business.

The tech giant, which is a primary supplier of equipment used in 5G telecommunications networks, has discussed how its executives were pushed to “a fatal impasse” and managed to “fight their way out” after Washington restricted the supply of chips and chip-design tools to U.S. companies. CFO Meng Wanzhou announced that “2022 is the year that we pulled ourselves out of crisis mode. We’re back to business as normal,” she added. The US has accused Huawei of being a security risk, something that the company denies.

R&D spending over the year increased by 13.2% to $23.50 billion, equivalent to a quarter of the company’s revenue. Such spending has assisted Huawei in replacing components in its products that were affected by U.S. trade sanctions. Founder Ren Zhengfei claimed that they had replaced over 13,000 parts. Chairman Eric Xu noted that the company saw areas such as green development as opportunities and that it was investing in 5.5th and 6th generation technology, hoping to start rolling out 5.5G products by 2025.

Revenue for 2022 reached $642.3 billion, representing mild growth over 2021 but far below the record $891.3 billion in 2019 when it was the top global Android smartphone vendor. Revenue from the enterprise division surged by 30%, sales for its telecommunications business increased by 0.9%, and sales from its consumer electronics business dropped by 11.9%. Huawei’s asset-to-liability ratio was 58.9%, and it had a net cash balance of $176.3 billion.

($1 = 6.8714 Chinese yuan renminbi)

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