Chinese company Huawei Technologies Co. remains a private company and therefore reserves the right to disclose information about its own financial situation on its own schedule. In the first half of this fiscal year, net profit dropped 36% year-on-year to US$3.54 billion.
Image source: Huawei Technologies Co., Ltd.
Meanwhile, the company’s revenue grew 10% at current exchange rates, to $69.6 billion. Research and development spending increased by a quarter to $18 billion. In fact, Huawei allocated 25.9% of its revenue to these needs in the past six months, which partly contributed to the decline in profits. First-half results were in line with the company’s internal forecasts, but Huawei is not yet as confident in its performance this year as external factors and rising parts procurement costs have increased uncertainty.
In the report, the company did not break down revenue by business segment, but highlighted that all businesses showed year-over-year core revenue growth. At the end of Huawei’s last fiscal year, revenue grew 2.2% to a record $131 billion since 2020. In the second half of the year, it was forced to accelerate the purchase of parts, which meant memory chips, which led to higher costs and lower profits. Meanwhile, while memory costs increased throughout the six months, it barely increased smartphone prices. Data from Counterpoint Research shows that a sales wave in June helped Huawei’s smartphone sales increase by 19% in the second quarter, and the company’s share of China’s domestic smartphone market later exceeded 20%.
September this year will be an important moment for Huawei, as it will launch the first HiSilicon Kirin mobile processor manufactured with Logic Folding technology, which theoretically allows it to overcome the technical obstacles of increasing transistor density without being able to use foreign advanced chip manufacturing equipment.
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