News Blacklisted Huawei posts record profits despite U.S. sanctions — Chinese tech giant raked in $7.7B in net profit in 1H 2024

[Admin]

Huawei seems to be adapting to U.S.-imposed sanctions as it posts record profits.

Blacklisted Huawei posts record profits despite U.S. sanctions — Chinese tech giant raked in $7.7B in net profit in 1H 2024 : Read more

 

[vanadiel007]

Well, that to me is another indication that trade sanctions hurt the consumer rather than the sanctioned companies.

Prices of everything keep going up here in North America, while we wage a war of sanctions that seem to have little to no effect on some sanctioned companies.

 

[The Historical Fidelity]

More like SMIC is subsidized by the government to produce 7nm chips and sell them to Huawei at a significant loss.

 

[tristanx]

They are forgetting there are other countries they can do business with. Those legacy brand countries has competition and no longer has the power over everything. On top of that, pricing issue.

 

[nookoool]

Huawei is becoming a beast of a company. I would not be surprise if Huawei will have to separate some business line once China can overcome the chip hurdles.

 

[Gururu]

I don’t think sanctions are intended to stifle their ability to sell abroad as much as they are intended to protect our consumer goods from prying eyes.

 

[nookoool]

I don’t think sanctions are intended to stifle their ability to sell abroad as much as they are intended to protect our consumer goods from prying eyes.

That doesn't make any sense. You can just not buy it.

 

[zsydeepsky]

More like SMIC is subsidized by the government to produce 7nm chips and sell them to Huawei at a significant loss.

you don't need to guess, since SMIC is an open company and they have to release their financial report.
the latest report is here (2024 Q2): https://www.smics.com/uploads/66b4a5ec/Q2_2024 Financials Presentation.pdf

just some quotes:

Revenue was $1,901 million
– Up 8.6% QoQ from $1,750 million in 1Q24
– Up 21.8% YoY from $1,560 million in 2Q23

Gross margin was 13.9%
– Compared to 13.7% in 1Q24
– Compared to 20.3% in 2Q23


obviously they aren't in the same good place like TSMC which enjoys 50%+ gross margin, but they aren't suffering "significant loss".

 

[The Historical Fidelity]

you don't need to guess, since SMIC is an open company and they have to release their financial report.
the latest report is here (2024 Q2): https://www.smics.com/uploads/66b4a5ec/Q2_2024 Financials Presentation.pdf

just some quotes:

Revenue was $1,901 million
– Up 8.6% QoQ from $1,750 million in 1Q24
– Up 21.8% YoY from $1,560 million in 2Q23

Gross margin was 13.9%
– Compared to 13.7% in 1Q24
– Compared to 20.3% in 2Q23


obviously they aren't in the same good place like TSMC which enjoys 50%+ gross margin, but they aren't suffering "significant loss".

Okay and so you take the 2.6 billion yuan (365.5 million USD) given to SMIC by the government for 2023 and SMIC’s admitted cost for their 7nm node being 50% greater with much worse yields than TSMC and you get significant loss. SMIC loses money on every 7nm chip sold. The only reason SMIC still makes a profit is due to their legacy node production and government subsidies.

https://www.scmp.com/tech/tech-war/...ions?module=perpetual_scroll_0&pgtype=article

 

[zsydeepsky]

Okay and so you take the 2.6 billion yuan (365.5 million USD) given to SMIC by the government for 2023

that's exactly why I consider SMIC is in good place. because if you look at Intel, you will realize that SMIC is only getting like 1/50 of the subside Intel got from the US gov and Intel is truly suffering heavy loss.

https://www.reuters.com/technology/intel-clinches-nearly-20-bln-awards-biden-boost-us-chip-output-2024-03-20/

 

[The Historical Fidelity]

that's exactly why I consider SMIC is in good place. because if you look at Intel, you will realize that SMIC is only getting like 1/50 of the subside Intel got from the US gov and Intel is truly suffering heavy loss.

https://www.reuters.com/technology/intel-clinches-nearly-20-bln-awards-biden-boost-us-chip-output-2024-03-20/

A one time subsidy for Intel is not the same as yearly subsidies given to SMIC. And Intel as a company represents a combined product company that has both foundries and end user product design elements. One could argue Intel’s foundries are doing just fine, but stressed in product design due to tough competition from AMD. Whereas Huawei has a monopoly on design in their respective market.

 

[zsydeepsky]

And Intel as a company represents a combined product company that has both foundries and end user product design elements.

If you compare Intel to Huawei+SMIC, then it would put Intel in an even worse comparison.
Huawei is in a much better position than SMIC, just quote from Toms, days ago:

https://www.tomshardware.com/tech-i...evenue for the first half of 2024 reached CNY

 

[The Historical Fidelity]

If you compare Intel to Huawei+SMIC, then it would put Intel in an even worse comparison.
Huawei is in a much better position than SMIC, just quote from Toms, days ago:

https://www.tomshardware.com/tech-i...evenue for the first half of 2024 reached CNY

Not really apples to apples comparison though, Intel doesn’t make anything buy chips. Now Apple vs Huawei is a good comparison. And Huawei looks small comparedly at $58.62 billion total sales 1H 2024 vs $85.2 billion 1H 2024 for iPhone sales alone and expects to break $400 billion in total sales for 2024.

 

[nookoool]

Not really apples to apples comparison though, Intel doesn’t make anything buy chips. Now Apple vs Huawei is a good comparison. And Huawei looks small comparedly at $58.62 billion total sales 1H 2024 vs $85.2 billion 1H 2024 for iPhone sales alone and expects to break $400 billion in total sales for 2024.

That is not fair either, Huawei's consumer division was wrecked by sanction until about 1 year ago.

 

[The Historical Fidelity]

That is not fair either, Huawei's consumer division was wrecked by sanction until about 1 year ago.

Reap what you sow