By LU Keyan

Huawei posted a record-low annual net profit of 35.6 billion yuan (US$5.2 billion) last year, down 68.7 percent compared with 2021. Its revenue in 2022 barely moved, climbing 0.9 percent to 642 billion yuan. Huawei spent 161.5 billion yuan last year on R&D last year, a record high.

MENG Wanzhou, CFO and soon-to-be rotating chairperson of Huawei, explained that the sharp drop in net profit was due to a decline in revenue from terminals, such as smartphones, and the high spending on R&D to ensure continuity under US sanctions.

All about survival

Huawei’s free cash flow dropped 70.8 percent year on year to 17.8 billion yuan, but Meng said cash in the bank account is?enough to support the investment of the company in the next few years.

“This year is vital to Huawei’s survival and development,” said deputy chairman XU Zhijun. “An austere non-market environment will continue to impact on our operation. We will have to weather the storms yet to come.”

Under US sanctions, Huawei now only has access to 4G chips, Xu said the company would need permission from the US Department of Commerce to get 5G chips. “We will rise from the sanctions,” Xu said.

In an internal speech a few days ago, Xu said Huawei has collaborated with domestic electronic design automation (EDA) enterprises to develop EDA tools. EDA software is essential for chip design. The subject is highly complex and has significant implications for chip self-reliance. Xu said in the future, domestic semiconductor enterprises would use domestic EDA tools.

Huawei released revenue of the digital energy, cloud and automotive business units for the first time. In 2022, digital energy brought in 50.8 billion yuan, cloud 45.3 billion yuan, and autos 2.1 billion yuan.

News from on-high

Just hours before the release of the 2022 report, founder and CEO of the company REN Zhengfei sent an internal memo to all employees in which he reiterated that Huawei will not make cars in the next five years, but will be a supplier to smart car enterprises.

On April 1, Meng, Ren’s daughter, begins her term as the rotating president. According to Huawei’s articles of association, the rotating president is the de facto boss of the company. Meng said Huawei is?not the company of one man or woman, but is?led by a group of people, with a well-established system.

“As an enterprise, Huawei can’t change geopolitics,” she said. “We can only try our best to adapt to any environment and thrive.”