After three years of US sanctions, Huawei emerges from the economic slump


2019 was a dark year for Huawei. A year after the arrest of Meng Wanzhou, daughter of the founder of the Chinese telecom group, the company was placed on an American blacklist: it was prohibited from buying any component – ​​electronic chips, for example – in the States. -United. After three years of falling turnover, Huawei is raising its head.

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At the end of October 2022, the world number one in telecoms, and ex-number two in smartphones, published higher results for the second quarter in a row, a sign that the new activities developed by the company are starting to pay off. The group points out that its sales of telecommunications network equipment have increased, while the fall in sales of consumer devices (mainly smartphones) has been stemmed.

Huawei’s revenue rose 6.5% to 144.2 billion yuan (19.5 billion euros) in the third quarter of 2022, according to figures released voluntarily by the company and not subject to audit, as the group is not listed on the stock exchange.

Fall in turnover

Hit by a first round of sanctions in 2019, Huawei had seen its turnover fall after a new salvo of restrictions, in 2020. This tightened the noose even more, by prohibiting any company using products (components or software) Americans to collaborate with the Chinese group. The company then had to do without the services of TSMC, the world leader in the production of semiconductors, which manufactured Kirin chips, Huawei’s subsidiary for chip design.

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Already prevented from using Google services, Huawei smartphones, deprived of 5G, therefore had to settle for 4G, enough to cool consumers. As a result, in 2021, a drop of more than 50% in smartphone sales for the company (which competed with Apple for second place in the world behind Samsung), with a turnover down 28.6%. The group had managed to maintain profits by selling its Honor brand, which can thus escape US sanctions.

Investment in the cloud

To survive these sanctions, Huawei has invested heavily in new sectors, where semiconductors are less essential. In the cloud, the company is progressing rapidly, in particular thanks to its good relations with the Chinese authorities: on the domestic market, the company is in second place, behind Alibaba and ahead of Tencent.

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In addition, Huawei also offers solutions for the “smart city” and surveillance (cameras and software). The company has developed an operating system for connected cars, usable by any manufacturer, and is pushing research into autonomous driving. Still on the automotive side, the group launched its own electric vehicle in September 2022.

The company also offers a wide range of connected objects, such as smart watches. At the same time, the company is investing heavily in the Chinese semiconductor ecosystem, hoping to eventually replace American components. However, the Chinese delay in this area is colossal.

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