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Huawei marches into smart manufacturing as US sanctions hit its consumer businesses

Written by Mengyuan Ge Published on     2 mins read

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The telecommunications giant seeks new growth in digital transformation services for traditional industries.

Huawei Technologies is escalating its efforts to provide new high-tech infrastructure for coal mining companies and other promising business sectors after US sanctions have tanked the sales of its smartphones and other consumer products.

Huawei founder Ren Zhengfei spoke to his staff on Thursday, saying that Huawei has established five new business units that will build products for companies that operate in coal mining, smart highways, data center energy management, customs and port operations, and smart photovoltaic cells.

The new divisions, which Ren refers to as Huawei’s “army,” will focus on the digital transformation for a range of traditional sectors that are adopting 5G mobile technology, cloud computing, AI, and the internet-of-things.

More than 300 Huawei employees will staff the five units, each of which will be led personally by Ren.

Notably, Huawei’s new divisions are less dependent on semiconductors than its existing business units. The company was barred from sourcing chips made by American companies after it was sanctioned by the US government in May 2019.

The company said in March that it had formed a new smart coal mine unit. The telecommunication giant is upgrading conventional coal mines to reduce the frequency of accidents and improve general efficiency. This line of business is expected to represent a larger share of Huawei’s revenue as it remains under US sanctions.

“I believe peace is achieved through battles.” Ren said at the inaugural meeting of Huawei’s new business units. “We must fight with hard work and heroic sacrifice to create a peaceful environment for the next 30 years, so that no one dares to bully us. We strive for ourselves and our country. History will remember our achievements,” Ren said.

Huawei’s consumer-oriented business continued to suffer losses in 2021. According to the company’s latest financial report, revenue for the first nine months of 2021 was RMB 455.8 billion (USD 71.3 billion), 32% lower than the RMB 671.3 billion (USD 104.8 billion) that was posted for the same period in 2020.

Meanwhile, Huawei occupies only 8% of China’s domestic smartphone market, compared to a 38% market share from a year earlier, when it was still the market leader, according to Counterpoint Research.

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