Despite taking a hit to its smartphone business under U.S. sanctions, China’s Huawei saw its profits more than double in 2023, boosted by sales of its new smartphone in the country.
Huawei said Friday that its profits increased more than 140% from the same period a year ago to 87 billion yuan, or $12 billion. It reported revenue at $99 billion, according to The Wall Street Journal — a 10% increase from the previous year. Huawei said the profit increase was driven by more sales of consumer electronics, such as its Mate 60 Pro smartphone, which has 5G-like capabilities powered by a Chinese-made chip. It also attributed profit growth to more cloud computing offerings, improved operations, the sale of some businesses, and its automobile solutions business.
While overall smartphone sales in China were down 7% year-over-year during the first six weeks of 2024, Huawei has seen a resurgence in the country after releasing its Mate 60 Pro smartphone series. Shipments of Huawei smartphones in China grew 47% year-over-year during the fourth quarter, according to data from Canalys.
Now Huawei is reportedly reprioritizing its chip efforts to focus on manufacturing AI chips, while slowing production of the chips needed to power the smartphones.
“We’ve been through a lot over the past few years,” Ken Hu, Huawei’s rotating chairman, said in a statement. “But through one challenge after another, we’ve managed to grow.”
U.S. restrictions on advanced technology shipments to China from U.S. tech companies — the latest announced in October — and a simmering chip war have made it hard for Chinese tech companies to source the chips they need for AI production. The hit from U.S. export controls is forcing Huawei to look inward. Almost 70% of the company’s revenue last year came from Chinese consumers, The Journal reports