Chinese supplier Huawei posted revenues of CNY 858.8 billion ($ 123 billion) in 2019, up 19.1% year-over-year, while net profit reached CNY 62.7 billion , up 5.6% from 2018, the company said in its annual report. report.
Huawei has reinvested 15.3% of its 2019 turnover – or CNY 131.7 billion – in R&D.
China’s revenues increased 36.2% to reach CNY 506.7 billion, representing 59% of Huawei’s total revenues, with an EMEA zone (24% of the total) stable at CNY 206 billion. Revenues in Asia Pacific (8.2%) decreased 13.9% to CNY 70.5 billion, while revenues in the Americas (6.1%) increased 9.6% to 52.5 billion CNY.
In 2019, revenues from Huawei operator activities reached CNY 296.7 billion, up 3.8% year-on-year. Eric Xu, rotating president of Huawei, said 5G revenues represent a small percentage of its carrier business, noting that 2019 introduced the introduction of 5G services in some markets, but that large-scale deployments do not have not yet taken place.
Huawei’s sales last year reached CNY 89.7 billion, up 8.6% from the previous year.
Huawei also said that its consumer business continues to experience robust growth, with a total of 240 million smartphones shipped throughout the year. In 2019, Huawei’s consumer business revenues reached CNY 467.3 billion, up 34% year-on-year.
“The external environment will only get worse in the future,” Xu said at a press conference to announce the annual results. “We must continue to improve the competitiveness of our products and services, promote open innovation and create greater value for our customers and society as a whole. This is the only way to seize the historic opportunities offered by the digital and intelligent transformation of industries and to maintain robust growth in the long term. “
Xu also said he was aware of the U.S. government’s plans to further tighten company restrictions, including preventing Taiwan Semiconductor Manufacturing from selling chips to Huawei. If this finally happens, the Chinese government will not tolerate such action and it will harm the global supply chain, said Xu.
“If Pandora’s box were to be opened, we will likely see catastrophic damage to the global supply chain – and it will not be a single company, Huawei, destroyed,” said Xu. “I don’t think the Chinese government will just watch and let Huawei be slaughtered on a cutting board. I think the Chinese government will also take countermeasures. “
According to recent reports, Washington plans to impose restrictions on the sale of semiconductors to Huawei by global companies such as Taiwan’s TSMC and Samsung Electronics.
“Why can’t China ban the use of 5G chips, base stations, smartphones and other US smart devices for the same reasons of network security?” Said Xu.
In May 2019, the U.S. Department of Commerce added Huawei to its list of entities, a move that effectively banned the company from buying parts and components from U.S. companies without U.S. government approval. Under the order, Huawei will need a U.S. government license to purchase components from U.S. suppliers.
At that time, companies like Google, Intel, Qualcomm and Microm stopped deliveries due to restrictions. Huawei relies heavily on computer chips imported from American companies.
Xu said the restrictions imposed by Washington resulted in a $ 12 billion shortfall in 2019.
Xu also said that Huawei’s production facilities in China have all been “fully restored” because the coronavirus epidemic is “under control in China”. However, with the pandemic still affecting countries such as the United States, it is possible that Huawei’s semiconductor supply lines may be interrupted.
“We are informed daily of our suppliers’ performance,” said Xu. “If some individual suppliers cannot continue to supply us, this will cause long-term problems and it will be unclear whether we can continue to supply the market. Of course, this is something we don’t want to see. “