The Huawei logo is seen during the World Artificial Intelligence Conference in Shanghai, July 6, 2023. AFP-Yonhap

Chinese telecommunications equipment giant Huawei Technologies is faced with lingering impacts of U.S. sanctions as well as intense competition with its Korean and other rivals in 2024 in Korea, despite a positive outlook for 2024 given by industry watchers.

Huawei is predicted to take the spotlight in the smartphone industry in 2024 with an expected double-digit growth in global shipments, according to a report by research firm TechInsights, Monday, which said the company could become "a big surprise" in the overseas market.

However, in Korea, the home to smartphone and semiconductor giant Samsung Electronics, the company is having difficulty expanding its market share against the biggest players, as well as securing trust from local partners amid the U.S.-China tech war.

Huawei has been offering products and services for Korean customers over the past two decades. While the company is involved in both consumer and enterprise businesses, it turned out that the consumer business has hit some roadblocks.

Huawei has been effectively absent from Korea's smartphone market for the past few years due to its "inability to source 5G chipsets," said Abhilash Kumar, an industry analyst for TechInsights. "South Korea's smartphone market is 5G-heavy with 5G penetration of more than 95 percent for 2023, so it made little sense for consumers to buy Huawei's 4G-powered phones."

Since 2019, the U.S. has barred the Chinese firm, on national security grounds, from accessing U.S. technologies including Google's Android operating system, which is used by rivals like Samsung. That has since dealt a heavy blow to the company's overseas sales.

While it briefly surpassed Samsung to lead global smartphone shipments in early 2020, as of the third quarter of 2023, it has dropped out of the top five smartphone brands in the world, lagging behind Apple, Samsung, as well as its domestic peers — Oppo, Xiaomi and Vivo — in shipments, according to data from research firm Counterpoint.

In Korea, Huawei's market share was just 0.1 percent in December 2023, in a stark contrast with Samsung's 68.7 percent and Apple's 26.5 percent, according to Statcounter, an online database.

Huawei Mate 60 Pro smartphones are seen on display at a flagship store in Beijing in this undated photo. Reuters-Yonhap

But things may be different this year, after Huawei made a surprise launch last August of its Mate 60 Pro, a handset equipped with an advanced, domestically developed 5G chip, indicating its ability in cutting-edge chips despite U.S. tech sanctions. The company is now reportedly aiming for a comeback in some overseas markets, including Europe. Will it also return to the Korean market?

"It looks unlikely," Kumar said. "Now that Huawei might have managed to source 5G chipsets locally, it's still difficult for it because the country is Samsung- and Apple-heavy and doesn't have much acceptance for Chinese vendors," he said.

Huawei has tried to launch both premium and affordable smartphones since 2014, but has been unable to gain ground "largely due to local operators' preference for Samsung," said Woody Oh, a service director at TechInsights. "To be successful in the Korean market, OEMs must seek operators' support."

Despite the difficulties, the company is pinning hopes on its enterprise services, as stated by Balian Wang, CEO of Huawei Korea, at a year-end event in Seoul late December.

In 2023, the 5G network supported by Huawei for Korean carriers ranked first in global tests, Wang said. In the enterprise business sector, Huawei Korea provided products including data center networks, campus networks and storage services.

Wang said the company is also expanding its foothold in the cloud computing market with a new cloud division established in Korea in 2023, hoping to serve the information technology and cultural entertainment industries.

Balian Wang, CEO of Huawei Korea, speaks during a press conference in Seoul, Dec. 20. Courtesy of Huawei Korea

Nevertheless, that led to another issue that Huawei needs to worry about — how to handle its relationships with local companies under the shadow of the U.S.-China tech war, despite its repeated denials of the accusation that it is a security threat.

SK hynix, the second-largest memory chipmaker in Korea, said in September that it started investigating how its two memory and flash storage products were found inside the latest Mate 60 Pro, as revealed in a teardown review of the device. It emphasized in a statement at the time that the company "no longer does business with Huawei since the introduction of the U.S. restrictions against the company."

Some Korean companies, such as business conglomerate LG, still maintain good relations with the Chinese company. Wang called LG Uplus, which is Korea's third-largest mobile carrier, one of its "important global clients," signaling stable cooperation between the two companies. LG Uplus is the only Korean telecom operator that is using Huawei's base station equipment.

Despite all the uncertainties, the top executive of the Korean unit has highlighted its commitment to Korea's tech industry.

Looking to 2024, Wang told local media that the unit, with more than 230 employees, planned to help achieve Korea's digitalization and carbon neutrality goals. It also plans to continue supporting the cultivation of 1,000 next-generation ICT professionals.

Ann Cao is a tech reporter with the South China Morning Post. She is currently based in Seoul, reporting for both The Korea Times and the South China Morning Post under an exchange program.