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

SHANGHAI, Dec 30 (Reuters) – Chinese technology giant Huawei Technologies Co Ltd ( HWT.UL ) on Friday estimated its 2022 revenue would be flat, suggesting its sales slump due to U.S. sanctions has stopped.

Although sales were up just 0.02%, rotating chairman Eric Xu struck an upbeat tone in the company’s annual New Year’s letter, where he revealed the figure.

“US restrictions are now our new normal and we are back to business as usual,” Sue wrote in the letter, which was addressed to staff and distributed to the media.

Revenue for the year is expected to be 636.9 billion yuan ($91.53 billion), according to Xu.

That represents a small increase from 2021, when revenue reached 636.8 billion yuan and sales fell 30 percent year-on-year after US sanctions against the company took effect.

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

Revenue for 2022 still remains well below the company’s record of $122 billion in 2019. At the time, the company was at its peak as the top Android smartphone vendor globally.

In 2019, the Trump administration in the US imposed a trade ban on Huawei, citing national security concerns that barred the company from using Alphabet Inc. (GOOGL.O) Android for its new smartphones, among other critical US-sourced technologies.

The sanctions led to a sharp decline in mobile device sales. It also lost access to critical components that prevented it from designing its line of smartphone processors at chip division HiSilicon.

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

The company began investing in the electric vehicle (EV) sector as well as environmental technologies around the time the sanctions came into effect.

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

Reporting by Josh Horvitz; Editing by Muralikumar Anantharaman

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