Huawei pushes ahead with $1.4b R&D center in Shanghai amid US trade tensions

Huawei Technologies, the world’s largest telecommunications equipment supplier, plans to invest 10 billion yuan (US$1.4 billion) in a new R&D center in Shanghai amid intensifying competition with the US in science and technology.

Photo credit: Tech in Asia

The new center, to be located in Shanghai’s Qingpu district, will focus on research and development in fields including chips for different devices, wireless networks, as well as the internet of things. Covering an area of about one square kilometer – about 130 football pitches in size – in Xicen community near Dianshan Lake, the new facility will house 30,000 to 40,000 Huawei employees, a company spokesman told local government officials last week.

Huawei now has 36 joint innovation centers and 14 R&D institutes around the world. Its existing Shanghai R&D center in Pudong district is also one of its biggest. The company declined to comment on details of the new plan.

Since the China-US trade war started in 2018, President Xi Jinping has reiterated in public speeches that China should play a stronger role in technology research and development.

Major Chinese technology companies including Huawei, ZTE, and DJI have been in the crosshairs of the US government, which has cited national security concerns in pursuing actions against the companies. Huawei was put on a so-called entity list in May by the US Department of Commerce, which has effectively barred the firm from buying hardware, software, and services from its American high tech suppliers.

Huawei reported a 23% gain in revenue to 401.3 billion yuan (US$58.3 billion) in the first six months of this year, helped by increasing smartphone shipments and demand for its 5G equipment, the Shenzhen-based company said on July 30.

Last year, more than 80,000 Huawei employees – 45% of its total workforce – were involved in R&D. A total of 101.5 billion yuan (US$14.4 billion) was spent on R&D last year, accounting for 14.1% of the company’s total revenue. The company has spent the equivalent of more than 10% of its sales revenue on R&D every year over the past decade.

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