Huawei, the global ICT leader, announced its H1 2023 business results, and its overall performance was in line with the forecast. In fact, 2023 marks the first year that the company has returned to business as usual post-pandemic, despite all the external restrictions and challenges it continues to face.
Huawei Rotating Chairwoman Sabrina Meng said: “Huawei has been investing heavily in foundational technologies to harness trends in digitalization, intelligence, and decarbonization, focusing on creating value for our customers and partners. In the first half of 2023, our ICT infrastructure business remained solid, and our consumer business achieved growth. Our digital power and cloud businesses both experienced strong growth, and our new components for intelligent connected vehicles continue to gain competitiveness."
In H1 2023, Huawei generated around US$42.9 billion in revenue, with a year-on-year increase of 3.1% and a net profit margin of 15%. The company's ICT infrastructure business contributed US$23.05 billion, its consumer business US$14.3 billion, its cloud business US$3.3 billion, its digital power business US$3.3 billion and its intelligent automotive solution (IAS) business US$137.8 million.
Reasons Behind Huawei’s YoY Increase
The company experienced year-on-year growth both inside and outside of China and says there are two main reasons behind this huge year-on-year increase. First, it has continuously optimized its management systems, improved the efficiency and quality of its operations, and refined its sales strategy and product mix. These actions have had a very positive impact on its profits. Second, in the first half of 2023, the company recorded partial gains from the sale of certain businesses.
Huawei says the industry and global markets will remain rife with uncertainty for the rest of 2023. Nevertheless, it will continuously build out its mechanisms for global business continuity management and an agile operations management system. Huawei is confident that it can meet its annual business targets and continue creating value for customers and society at large.
Five Strategic Initiatives
Huawei successfully rolled out its new MetaERP system in the first half of this year. But the US has continued to tighten restrictions on Huawei. Even in such an uncertain environment, the company is confident that it will continue making breakthroughs. Moving forward, it will implement five strategic initiatives.
First, it will help industries go digital, intelligent and green to unlock new growth opportunities.
Second, it will optimize its business portfolio to enhance resilience.
Third, it will strengthen the synergy between chips, software, hardware, devices, networks and clouds to hone its unique competitive edge.
Fourth, the company will succeed through quality and make Huawei synonymous with such high quality in the ICT industry.
Fifth, it will invest heavily in R&D to ensure a high level of business continuity and enhance product competitiveness.
Performance Breakdown Per Segment
In the consumer business, Huawei announced that this year the launches of its flagship products will return to normal. In the first half of 2023, Huawei unveiled two brand-new flagship smartphones. This helped Huawei return to China's top-five smartphone vendor ranking in the second quarter of this year. The company believes that to gain a foothold in the highly competitive consumer devices market, it must rely primarily on R&D and strong investment in new technologies. It will constantly increase investment in innovation and R&D in order to develop more competitive products and services that can deliver consumers even better experiences.
In the carrier business segment, Huawei announced that it will launch a full lineup of commercial 5.5G network equipment by 2024 to help its customers prepare for commercial 5.5G deployment. Huawei has been working with multiple players across the industry in R&D and the verification of key 5.5G technologies. Significant progress has been made in this verification process, specifically in extremely large antenna arrays (ELAA), which underpin 10-gigabit downlink; flexible spectrum access that helps realize gigabit uplink; and passive IoT that can enable 100 billion IoT connections.
Huawei has been working on applying AI-native technologies to 5.5G core networks to deliver AI capabilities to the very ends of networks so that they can better serve numerous industries. Net5.5G promises 10-gigabit access, ultra-broadband transport and microsecond-level latency over AI networks, allowing it to serve as a next-generation network foundation for industrial digitalization by providing high-quality network access.
Huawei Cloud has adhered to the strategy of "Everything as a Service" in its mission to become the cloud foundation and enabler of industry digitalization. Currently, Huawei Cloud covers 83 availability zones (AZs) across 29 geographical regions, providing services for customers in more than 170 countries and regions around the world. Huawei Cloud has gradually become the preferred partner for many customers looking to migrate to the cloud in industries like finance and manufacturing.
With regards to what drives Huawei's digital power business, Huawei says that carbon neutrality has become the most definitive trend of the 21st century as the energy industry moves from a resource-dependent approach to technology-driven models. The industry is now turning to technological innovations like wind, solar power, energy storage, power electronics and digitalization to realize growth rather than traditional natural resources like coal and oil. The energy industry is unmistakably going low-carbon, electric, digital and intelligent faster than ever before.
Building on the 4Ts (Bit, Watt, Heat and Battery technologies), Huawei Digital Power focuses on key technologies and products and continues to innovate in clean power generation, mobility electrification, green ICT power infrastructure and many other domains. The company is working alongside its partners to provide customers worldwide with all-scenario, low-carbon products and solutions that will help achieve carbon neutrality faster.
Huawei Digital Power has seen steady growth, taking advantage of the broader trend of carbon neutrality. By the end of June 2023, the division had helped its customers generate 845.5 billion kWh of green power and save 35.5 billion kWh of electricity. These efforts have reduced CO2 emissions by 400 million tons, roughly the same as planting 540 million trees. Moving forward, Huawei Digital Power will continue to position itself as a "technology product company" and leverage its long-standing technological advantages to facilitate the green and low-carbon transition and sustainable development across industries.
Huawei continues to believe that cyber security is its top priority. Huawei’s equipment has been routinely and closely scrutinized by the government and relevant security agencies according to stringent cybersecurity standards. There have never been any records showing Huawei's equipment has any backdoors throughout the past two decades. The company remains proud of its security record and is committed to continuing to deliver globally certified and trusted products and services across the continent that help connect millions of people.