The US war on Huawei brought down sales internationally, but China’s 700,000 5G cells and explosive cloud growth meant Huawei had an up year. The chip blockade did hurt in Q4 and will continue to hold down sales in 2021. Huawei has sufficient reserves to outlast the United States until China catches up in chip production.

Perhaps the most important figure in the financial report was the $55 billion cash. Another $10 billion will come in from the sale of Honor/Glory. Huawei is only carrying $21 billion in debt, implying it has plenty of borrowing power on commercial terms.

“The supply restrictions for our smartphone business have caused us a great impact,” reflects Hu Houkun (Ken Hu) Huawei’s Deputy Chairman, Rotating Chairman. “The growth rate of the consumer business has indeed not met expectations. Huawei’s mobile phone sales have been advancing all the way for so many years. Last year, it was affected by supply problems. Revenue is declining.”

If the chip problem continues, that will cost $20-40 billion in sales and $5-15 billion in cash flow. Other divisions of the company are growing, especially Huawei Cloud and sales of routers, switches, and LANS. The chart from Dell’Oro shows a steady increase. (Red line.)

Huawei doesn’t separate revenues from Cloud, although it believes Huawei Cloud has the fastest growth in a rapidly expanding market. In China, Huawei has passed Tencent and Baidu, although Alibaba is far ahead. New data centers are opening from South Africa to Singapore to Chile. By the end of 2021, the run rate should be about $2 billion/quarter.

“Behind the growth, Huawei has seized several key opportunities. From an industrial perspective, despite the severe epidemic last year, demand for network capacity and services is increasing. The operator’s business has maintained stable development. The corporate business has maintained double-digit growth.”

The $400 billion China-Iran deal will likely provide billions for Huawei. Auto electronics will grow rapidly, with Daimler a leading customer worldwide. China builds over 25 million cars each year. Auto electronics and software is a $400 billion/year market. Huawei is rapidly gaining share.

“The HMS ecosystem has now become the world’s third-largest mobile application ecosystem, and its development speed has exceeded our expectations.” Hu Houkan. It will take time but will become very profitable.

Huawei spent $21 billion on research and development in 2020. Patents should soon bring in over $billion/year.

Huawei will not just survive. The chip problem will be resolved either politically or through China production. With a little luck after that, China may have its first trillion-dollar company.