Despite US sanctions, Huawei sees blockbuster 144% jump in profits in 2023

Posted on : 2024-04-01 16:54 KST Modified on : 2024-04-01 16:54 KST
Chinese chip foundry SMIC, however, saw falling profits
A sign for Huawei glows at the company’s booth at a telecom fair in Paris, France, on March 20, 2024. (Reuters/Yonhap)
A sign for Huawei glows at the company’s booth at a telecom fair in Paris, France, on March 20, 2024. (Reuters/Yonhap)

While facing sanctions from the US, the Chinese telecommunications equipment company Huawei Technologies saw its profits more than double last year compared with 2022.

Meanwhile, SMIC, China’s biggest semiconductor foundry company and another target of US sanctions, faced a more than 50% decline in profits.

On Saturday, Huawei announced that it had recorded 704.2 billion yuan (US$97.53 billion) in annual sales for 2023, with net profits of 87 billion yuan. These figures respectively represented increases of 9.6% and 144.5% from their 2022 levels.

By area, the company counted 252.5 billion yuan in sales — an increase of 17.3% compared with 2022 — for its consumer sector, which includes smartphones. In the case of the information and communication technology infrastructure, which represents the largest portion of Huawei’s business, sales amounted to 362 billion yuan, a 2.3% increase from the year before.

In the category of cloud computing, sales totaled 55.3 billion yuan, up by 21.9% from their 2022 level.

The 9.6% increase in sales recorded by Huawei was the largest since US sanctions took full effect in 2019. The consumer sector, including smartphones, was a major contributor to the rise in sales.

After reaching the No. 2 spot on the global smartphone sale rankings in the late 2010s, Huawei was knocked out of the top five once US sanctions against it kicked in. But the overwhelming popularity of its Mate 60 premium smartphone, released last August, helped to majorly boost its phone sales.

Broken down by region, Huawei saw 471.3 billion yuan in domestic sales, up 16.7% from the previous year, while sales in North America came to 35.3 billion yuan, up 10.9%. 

Meanwhile, SMIC, the largest chip foundry in China, saw 45.2 billion yuan in sales last year, a year-over-year drop of 8.6%. The foundry also recorded a net profit of only 4.8 billion yuan, a 60.3% plunge from 2022. While it saw a 5.9% growth in sales in the domestic market, its sales in the US and elsewhere were down 4.4% and 1.5%, respectively. 

By Choi Hyun-june, Beijing correspondent

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