Huawei increases investment in R&D, expands R&D staff

Huawei said its investment in R&D represented 25.1% of total revenues last year

Huawei increased its investment in R&D and expanded its R&D staff last year as part of the vendor’s efforts to stabilize its business amid the sanctions imposed by the U.S. government

Huawei’s CFO Meng Wanzhou said the vendor’s R&D investment increased 13.2% year-on-year to CNY161.5 billion ($23.5 billion) in 2022, representing 25.1% of total revenue. In 2021, R&D investment in 2021 had accounted for 22.4% of total revenues.

The executive also said that R&D staff increased 6.2% to 114,000.

In 2022, Huawei reported a net profit of CNY35.6 billion, a decline of 68.7% year-on-year. Huawei noted that the figure for 2021 included one-off gains from the sale of its Honor sub-brand.

The Chinese vendor also reported annual revenues of CNY642.3 billion, flat year-on-year.

Its enterprise business revenue climbed 30% year-on-year to CNY133.2 billion, while revenues from its carrier group were flat at CNY284 billion. Huawei’s revenues from its consumer division declined 11.9% to CNY214.5 billion.

Huawei said its cloud computing and digital power businesses recorded combined revenue of CNY96.1 billion and accounting for 15% of total revenues.

“In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei’s operations,” said Eric Xu, Huawei’s rotating chairman, at the company’s annual report press conference. “In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers. We also went to great lengths to grow the harvest – generating a steady stream of revenue to sustain our survival and lay the groundwork for future development.

“2023 will be crucial to Huawei’s sustainable survival and development. … While it’s true that we have considerable pressure ahead of us, we have what it takes to come out the other end,” Xu said. “We are confident in our ability to rise above any challenge that comes our way, laying a solid foundation for sustainable survival and development,” he added.

Huawei has been the target of U.S. restrictions on the use of its equipment and services. The U.S. Federal Communications Commission (FCC) has implemented rules that prohibit communications and video surveillance equipment made by Chinese companies including Huawei, ZTE, Hytera, Hikvision and Dahua from being authorized for import and use by U.S. buyers.

The equipment and vendors in question were already prohibited from being used or purchased with federal funds, as well as being on a list of risky equipment maintained by the FCC that is deemed to pose “an unacceptable risk to national security.”

Click here to access to the full Huawei 2022 Annual Report.