China’s Huawei sees ‘business as usual’ as impact of US sanctions eases – Reuters

World Conference on Artificial Intelligence in Shanghai

SHANGHAI, Dec. 30 (Reuters) – Chinese tech giant Huawei Technologies Co Ltd (HWT.UL) estimated on Friday that sales for 2022 were flat, suggesting that the decline in sales due to US sanctions had stalled.

Despite sales rising just 0.02%, rotating chairman Eric Xu struck an optimistic note in the company’s annual New Year’s letter, where he revealed the figure.

“U.S. restrictions are now our new normal, and we are back to business as usual,” Xu wrote in the letter addressed to staff and released to the media.

Sales for the year are expected to reach 636.9 billion yuan ($91.53 billion), according to Xu.

That’s a small increase from 2021, when sales hit 636.8 billion yuan, and marked a 30% year-on-year sales decline as US sanctions against the company took effect.

Xu’s letter did not mention Huawei’s profitability. The company typically announces its full year results in the first quarter of the following year.

A person stands at a Huawei sign during the World Artificial Intelligence Conference, following the outbreak of the coronavirus disease (COVID-19), in Shanghai, China, September 1, 2022. REUTERS/Aly Song

Revenue for 2022 still fell far short of the company’s record $122 billion in 2019. At the time, the company was at its peak as the top supplier of Android smartphones worldwide.

In 2019, the US Trump administration imposed a trade ban on Huawei, citing national security concerns, which prevented the company from using Alphabet Inc’s (GOOGL.O) Android for its new smartphones, among other critical technologies of American origin.

The sanctions plummeted handset sales. It also lost access to critical components that prevented it from designing its range of smartphone processors under its HiSilicon chip division.

The company continues to generate revenue through its networking equipment division, which competes with Nokia (NOKIA.HE) and Ericson (ERICb.ST). It also operates a cloud computing division.

Around the time the sanctions came into effect, the company started investing in the electric vehicle (EV) sector and green technologies.

“The macro environment may be fraught with uncertainty, but what we can be sure of is that digitization and decarbonization are the way forward, and those are where future opportunities lie,” Xu said in the letter.

Reporting by Josh Horwitz; Edited by Muralikumar Anantharaman

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