In 2022, we successfully pulled ourselves out of crisis mode. US restrictions are now our new normal, and we’re back to business as usual. It’s been all hands on deck for the past year, with every single member of the Huawei team working hard to navigate challenges and improve the quality of our operations. We expect to round off the year with a total revenue of 636.9 billion yuan, which is in line with forecast.
This past year, our ICT infrastructure business maintained steady growth, and the decline in our device business has abated. We achieved rapid growth in digital power and Huawei Cloud, and took the competitiveness and user experience of our intelligent automotive components to new heights.
The strength of pines is most pronounced in the depths of winter, as are the ties that bind us. Huawei would not have been able to weather such extreme difficulties without the tremendous trust and support of our customers and partners. For this, we are forever grateful.
We are also immensely proud of the Huawei team: We’ve managed to keep our heads above the water because we fought together, united as one. This is especially true of our frontline staff outside of China – those who have held the fort to serve our customers despite the adverse impacts of COVID-19 and external restrictions. And of course, we wouldn’t be where we are today without the unfailing support of our families and loved ones as well. They’re our rocks, and we are fortunate to have them at our back.
On behalf of the company, I’d like to express our sincere gratitude to all of you.
The macro environment may be rife with uncertainty, but what we can be certain about is that digitalization and decarbonization are the way forward, and they’re where future opportunities lie. Faced with external volatility, we need to remain focused and stay true to our vision and mission. We need to double down on our commitment to building the foundations of the digital economy and to driving green and sustainable development. By doing this, we can create greater value for our customers, partners, and society at large.
2023 will be the first year that we return to business as usual with external restrictions still in place. It will be a crucial year for us, so we need to actively drive progress, keep inspiring passion across the organization, and further hone our capabilities. We need to be proactive about improving the business environment and more effectively managing risks. This is the only way we can reach our business goals for 2023 and lay a solid foundation for Huawei’s continued survival and development. Specifically, we need to:
1. Maintain heavy investment in R&D. We need to make our products and solutions more competitive through innovation, reshaping architecture, and systems engineering design. We have to fully commit ourselves to future-oriented basic research and open innovation, and focus our limited resources on value-creating domains. In addition, we need to uphold open collaboration across the value chain to guarantee our supply continuity and resilience.
2. Secure victory through quality. External restrictions are a fact of life these days, so it’s more important than ever that we make Huawei synonymous with high quality in the ICT industry, and secure victory through quality. To continuously create value for customers, we need to enhance total quality management based on ISO 9000 standards, and implement a strategy-driven, all-hands, and full-process quality management system across our entire value chain in alignment with our customers’ needs. Additionally, we need to extend our quality management mechanisms and requirements to all segments of the supply chain that we’ve restructured over the past few years. We need to invest more, and improve quality together with our suppliers in order to deliver high quality to our customers.
3. Commit to progress and seize opportunities to grow the harvest. Huawei’s strength lies in our diverse business portfolio and strong business resilience, and we should leverage this to realize high-quality growth. In the ICT infrastructure business, we need to be proactive in unearthing digital opportunities in various industries to drive effective growth. Huawei Cloud needs to become the foundation – and enabler – of digital transformation for both Huawei itself and vertical industries. In digital power, we need to boldly invest in strategic opportunities, make our products more competitive, and effectively manage supply uncertainties of bulk commodities worldwide. In our device business, all domains need to put the product at the center of everything they do and concentrate resources on developing best-in-class products that truly shine. They need to fulfill their operating responsibilities and strive to increase their input-output ratio. Our Intelligent Automotive Solution BU needs to focus on key components, and scale up commercialization of products to secure business success.
All of our business domains need to optimize resource allocation, pass down and enforce business performance accountability, and enhance key capabilities in operations management. All business domains also need to follow corporate guidelines for distributing bonuses based on contribution and widening bonus gaps, which will encourage all operating units to create greater value.
4. Press ahead with transformation to inject vitality into the organization and motivate everyone to forge ahead. We will continue moving forward with our Contract Reviews and Conclusions at Rep Offices Transformation, and expand the pilot of our Rep Office Integrated Business Transformation. These programs will help unlock the operating potential of our field offices and foster greater autonomy. In terms of leadership management, while we work to optimize policy, we will continue to implement the term of office system and roll out fundamental requirements for three types of experience: field experience and entry-level experience for all, and overseas experience for key positions. The goal is to build a more dynamic managerial team and inspire both managers and professionals alike to forge ahead. In addition, we will continue expanding the scope of specialist teams, optimizing relevant policies, and ensuring team stability.
Cultivating local teams is crucial to our long-term survival and development in local markets outside of China, so we need to actively build out and manage our local workforce. In terms of competency & qualification (C&Q), we will pilot independent C&Q assessments, refine C&Q criteria, and leverage C&Q to drive self-study and capability enhancement. Heroes can come from anywhere, and experts exist in all trades. We hope to see talented people emerge in great numbers – people who will do their best in the positions that suit them most, and make outstanding contributions.
Over the past three decades, Huawei has joined hands with carriers around the world to build leading communications networks. For the past ten years, we have ramped up investment in cloud computing, which has put Huawei Cloud in a better position to become the foundation and enabler of the digital world. In the decade to come, working with our ecosystem partners, Huawei will build industrial Internet platforms and cutting-edge solutions that help industries go digital, intelligent, and low-carbon. We will go all out to bring digital to every person, vehicle, home, and organization, putting our vision of an intelligent world within reach.
Fire is the test of gold; adversity is the touchstone of strength. Ghanim Al-Muftah, an ambassador for the 2022 FIFA World Cup who was born without the lower half of his body, is a testament to just how unyielding – and yet glorious – life can be. As long as we hold fast to our ideals, nothing can weigh us down. The future brims with hope, and this is what drives us forward. Any bumps along the way will only make the journey more valuable and meaningful.
2023 will be an extraordinary year. Forge ahead and rise above the challenges that come our way. Let’s put in the work to carve out our long-term, sustainable survival.
- Eric Xu, Huawei’s Rotating Chairman