• Chinese vendors continue to get bigger despite multiple trade sanctions and barriers
• Huawei’s first half sales grew by 4% while ZTE’s increased by 14.5%

We’ve said it before and we’ll say it again: Export sanctions and other trade pressures aren’t sending Huawei and ZTE to the vendor graveyard… quite the opposite, in fact. For the first six months of this year, both Chinese companies reported an increase in year-on-year sales (if not profits). 

In a report filed with the Shanghai Clearing House, Huawei Investment & Holding, the privately held vendor’s shareholding entity, reported revenues of 427bn Chinese yuan ($59.9bn) for the first half of this year, up by 4% compared with the same period in 2024. 

The giant vendor’s net profit fell by 32% to 37.2bn yuan ($5.21bn) due, in part, to a 9% increase in R&D spending to 97bn yuan ($13.6bn), equivalent to almost 23% of Huawei’s total revenues for the period. No details were provided but Huawei is known to be investing heavily in AI and its own chipsets to overcome US trade sanctions and help develop a local tech supply chain in China that is no longer dependent on US-developed technology.  

ZTE, meanwhile, reported revenues of 71.55bn yuan ($10bn), up by 14.5% year on year. Almost 71% of ZTE’s sales came from its domestic market. Network infrastructure products generated about 49% of revenues, while enterprise and government customers generated 26.9% of sales and the vendor’s consumer products generated 24.1% of sales. At 19.25bn yuan ($2.7bn), ZTE’s enterprise revenues for H1 were up by 109% year on year. 

ZTE spent 12.66bn yuan ($1.77bn) on R&D, only slightly more than it did a year ago, so its R&D investments did not scale in line with its sales growth. 

Its net profit for the first half of the year was 5.06bn yuan ($709m), down by 11.8%. 

“As AI infrastructure deployment accelerates, the company’s revenue mix has shifted, while growth in the government and enterprise, and consumer businesses has also placed phased pressure on the gross margin,” noted ZTE in its earnings press release. 

The company noted it has “advanced its ‘All in AI, AI for all’ strategy to accelerate innovation through AI-ICT integration. The company capitalised on AI-driven opportunities across network infrastructure, computing infrastructure, industry applications and terminals,” it added. 

- Ray Le Maistre, Editorial Director, TelecomTV