Huawei’s Digital Power Business Key to ‘Survival’ Amid U.S. Crackdown

May 31, 2022
Huawei’s Digital Power Business Key to ‘Survival’ Amid U.S. Crackdown
Asia-Pacific head says Chinese company is 'welcomed in many countries'.

Huawei Technologies is strengthening its new digital power business to help ensure the Chinese tech giant’s “survival and development” in the face of U.S. sanctions that have hampered its core communications equipment units.

Boham Sun, the president of Huawei Digital Power Asia-Pacific, told Nikkei Asia in an interview that “the sanctions do pose significant challenges for Huawei,” with the company “still in survival mode.”

He said the growth of the digital power business, which provides key devices such as inverters and AI-based energy efficiency systems to facilities like solar energy farms and data centers, will “contribute greatly to Huawei’s survival and development.”

The Asia-Pacific “is the one [market] with the biggest potential” for the company’s digital power business, he said, as “all the countries in the region are actively participating in the carbon-neutral and green energy area.” He added that “Huawei is welcomed in many [of these] countries.”

Huawei has been restricted from accessing key American technologies due to the U.S. crackdown, significantly impacting its smartphone business. The U.S. and some other Western nations have also moved to ban the use of Huawei’s 5G equipment in their communications infrastructure. Huawei in March reported total revenue of 636.8 billion yuan ($99.9 billion) in 2021, down 28.5% from 2020. However, the company’s net profit rose more than 75% in 2021 due to steady growth in profitability and one-off gains from spinning off some of its businesses. 

Known for its communications equipment and smartphones, the company also has a significant global market share for inverters, a vital device used in solar energy farms and data centers. According to Sun, Huawei ranks No. 1 both in China and globally in the inverter business.

Huawei initially developed digital power technologies for use with its own communications equipment. Based on these technologies, Huawei later established a range of products for industries such as photovoltaics and data centers. In June 2021, the company set up the digital energy business as a separate unit.

Huawei has “gained rich experience in power generation, transmission, distribution in the past 30 years,” Sun said, adding that the new business group’s revenue grew over 30% in 2021. “We can see ourselves maintaining a strong growth this year,” he said.

Huawei’s digital power segment has around 6,000 employees, with 12 research and development centers in China, Europe, and Asia.

The digital power business has been pushing into the Asia-Pacific. In Singapore, clean energy provider Sunseap uses Huawei’s devices and technologies for its floating solar farm. Huawei has also provided solar power technologies to schools and hospitals in Indonesia and Cambodia.

Sun said there is a “huge demand” for his business unit in the Asia-Pacific region, mentioning Japan, South Korea, Indonesia, Thailand, and Vietnam.

“We’re compliant with all the regulations in the local communities and markets. Because of that, we earned the trust of the local customers and the government,” he said.

Asked if the U.S. sanctions are affecting the supply chain of Huawei’s digital power business, Sun said, “Huawei is in the progress of diversifying supply chains, so we don’t have to rely on a single country or company.” But he also said Huawei is “not in the stage where the sanctions will have no impact on the company.”

Sun revealed that the inverters the company provides to Asia-Pacific customers “are all made in China through a global supply chain,” but that it is considering “building them in other countries as well if there is a need to do so.”

Amid supply chain disruptions in China due to COVID-related lockdowns in and around Shanghai, Sun said the company has “diversified suppliers [so that] we can maintain our business continuity and meet our customers’ needs.”

For the future expansion of Huawei’s digital energy business, Sun pointed to the electric vehicle boom, saying he is “very optimistic about the future of the charging network industry.”