Beijing Fired Huawei Comeback With $6bn Backing in 2023

Reporters at the Wall Street Journal have discovered the secret behind Huawei’s impressive fightback after the US and other Western nations began imposed sanctions on the Chinese tech giant Huawei five years ago – “massive” support from Beijing.

And while news that the Chinese government assisted the company is perhaps no surprise, the scale of that official help is extraordinary.

Wall Street Journal reporter Liza Lin said in a mailout today (July 30) that Huawei Technologies had received more than $1 billion in government grants last year, which she said was roughly four times what the Shenzhen-based group received in 2019.

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“Even more consequential was government demand for Huawei’s products,” she said. “For 2023 alone, we found government procurement contracts worth around $5 billion that exclusively requested hardware powered by Huawei’s CPUs [computer processing units] — a stark shift from five years ago, when government agencies showed a preference for products from Intel and other American companies.

That support “allowed Huawei to continue investing billions in the research and development needed to churn out new products and alternatives to Western technology,” she said.

Huawei’s “comeback” became notable last August when the company produced a high-end smartphone powered by a domestically-made 7-nanometre chip, which was a fair jump given China was assumed to be up to a decade behind TSMC and other firms with the leading chipmaking capabilities.

That news sparked a patriotic wave in favour of Huawei, as it was seen to have emerged victorious over US sanctions that once debilitated it.

And with the Chinese government working hard to dump US technology, its phones have continued to sell well at home.

Huawei saw a 41% jump in smartphone shipments year-on-year, to 10.6 milion in the second quarter of 2024, data from market research firm Canalys showed.

Lin said Huawei is “stronger than ever, with new divisions selling semiconductors, cloud computing and enterprise software.”