Huawei Reports Significantly Lower Profit in 2022.

The Chinese technology giant Huawei reported on Friday a sharp decline in profit and nearly stagnant revenue in 2022, pressured by a strained chip supply due to U.S. restrictions and increased investments in research and development.

Huawei’s net profit amounted to 35.6 billion yuan ($5.2 billion) last year, approximately two-thirds lower than in 2021, when it was boosted by sales from its Honor smartphone business.

However, it is also significantly lower compared to 2020, by as much as 44 percent.

Revenue, on the other hand, increased slightly by 0.9 percent to 642.3 billion yuan. In 2019, it was as high as 891.3 billion, as Huawei was then still the leading manufacturer of smartphones with the Android mobile operating system.

Last year’s results signal a stabilization of Huawei’s business after several packages of U.S. export restrictions, which particularly hit its smartphone business hard.

– In 2022, Huawei’s business was pressured by a challenging external environment and non-market factors – stated rotating chairman Eric Xu in a press release.

– In 2023 and in the years to come, Huawei’s strategic focus will be on sustainable survival and development. After a harsh winter, plum blossoms are usually more beautiful. Huawei today is like a plum blossom – said Xu.

Huawei is currently the leading supplier of 5G mobile network equipment, but its business has been targeted by U.S. export controls since 2019, which have restricted its supply of chips and chip manufacturing equipment in the U.S.

Last year, revenue in the industrial projects division surged by 30 percent. Revenue in the telecommunications business increased by 0.9 percent, while revenue from consumer electronics sales plummeted by 11.9 percent.

Spending on research and development rose by 13.2 percent to 161.5 billion yuan, which corresponds to a quarter of Huawei’s revenue, emphasized deputy chairwoman and chief financial officer Wanzhou Meng.