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Huawei vows to revive smartphone business, chip development despite struggles with US sanctions
- Huawei rotating chairman Guo Ping expects the company to regain its status as China’s leading Android smartphone vendor, as it works with supply chain partners
- He said the company will continue its efforts in semiconductor development, which have been hampered by tighter US trade restrictions
Telecommunications giant Huawei Technologies Co plans to revive the fortunes of its struggling smartphone business, according to rotating chairman Guo Ping, as the company continues to work with its supply chain partners amid crippling US trade sanctions.
“Huawei will remain in the smartphone business,” said Guo in comments published on Tuesday on the firm’s Chinese social media accounts, including WeChat and Weibo. “We will eventually retake our throne in the smartphone market, while continuing to improve our chip-making capabilities.”
Guo, without elaborating, signalled Huawei’s ambition to expand its role in the semiconductor supply chain, with the help from its domestic and overseas partners.
Privately held Huawei, the world’s largest telecoms equipment maker and formerly China’s biggest smartphone vendor, was added to Washington’s trade blacklist in 2019. It has scrambled to adapt its operations to tighter restrictions imposed last year, covering access to chips developed or produced using US technology, from anywhere.
Guo, who shares Huawei’s rotating chairman title with Eric Xu Zhijun and Ken Hu Houkun, indicated that the Shenzhen-based company will require more investment and innovation to deal with the disruptions caused by the US trade sanctions, according to his address to new employees on Tuesday that was published on Xinsheng Shequ, the firm’s online community.
The comments made by Guo, who joined Huawei in 1988, provide a more upbeat message to the company’s workers and business partners around the world, following recent revelations that it was in survival mode.
“Our aim is to survive, and to do so sustainably,” said Xu, who is Huawei’s acting chairman from April 1 to September 30 this year, after the company posted its latest interim financial results earlier this month.
Huawei reported its worst first-half revenue decline in decades, down 29.4 per cent from a year ago to 320 billion yuan (US$49 billion), amid US trade sanctions on essential hardware components and software that hammered sales at its core smartphone business.
Revenue from Huawei’s consumer business group, comprising mainly smartphone sales, nearly halved to 135.7 billion yuan in the first half, from 255.8 billion yuan in the same period last year, as the company’s international market share dwindled over its lack of access to advanced chips. In China, the world’s largest smartphone market, Huawei fell out of the top five vendor rankings in the second quarter for the first time in more than seven years.
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Guo’s positive outlook on continued semiconductor development, which Huawei pursues under its integrated circuit design unit HiSilicon, comes after a former senior minister in Beijing called for support in helping the company establish a viable chip supply chain amid foreign efforts to suppress this goal.
“TSMC has already ceased its partnership with Huawei [because of US trade restrictions],” said Li Yizhong, who was China’s Minister of Industry and Information Technology from March 2008 to December 2010, in a speech at the Beike Finance Summer Summit in Beijing on August 5. Li referred to Taiwan Semiconductor Manufacturing Co, the world’s biggest and most advanced contract chip maker.
“Huawei has ambitions to create its own chip manufacturing line,” he said. “We should understand [this initiative] and support it.”
Since late last year, Huawei has made tactical moves to build up its other businesses, while working to stay relevant in the smartphone industry amid stiff competition from other major Chinese Android handset vendors, including Xiaomi, Oppo and Vivo.
Those initiatives include expanding its cloud services operations in the Asia-Pacific region, helping domestic enterprises cut their carbon footprint, supplying more 5G base stations and core network gear to China’s major telecoms operators, increasing patent licensing deals, establishing partnerships for its HarmonyOS mobile platform and selling its Honor budget smartphone unit.
This article appeared in the South China Morning Post print edition as: Huawei vows to revive smartphone business
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