Huawei Hires More Scientists, Boosts Basic Research to Deal With US Semiconductor Ban

The Chinese tech giant scaled down its production of smartphones in the wake of Washington imposing restrictions on the sale of US-made technologies to Huawei, including semiconductors. Instead, the company focused on developing its automotive department.

China's Huawei did not descend into "chaos" following the introduction of US limitations on technology sales to the tech giant, but instead has become "more united than ever, and has even attracted more talent", CEO Ren Zhengfei stated. He made the comment during an internal meeting in early August, whose contents became available to the public on 15 September.

Zhengfei noted that, even with revenues declining due to a drop in smartphone sales, the company did not stop hiring, especially new scientists. He explained that the only way to overcome the restrictive US measures, which had cost the company its earlier advance on the smartphone market, was to invest in basic science.

"If the company hadn't paid attention to basic science and research, engaged in deep cooperation with the world's leading scientists, or valued those engaged in basic research over the past decade, we wouldn't have accumulated the huge amount of theoretical, technological, and engineering knowledge necessary to overcome the difficulties created by US restrictions and blocks".

Ren Zhengfei

Huawei CEO

Huawei hired some 3,000 new employees between the end of 2019 and the end of 2020, with over half of all workers being scientists, the publication said. Yet, the company and China in general are still lagging behind in some technological areas, such as machine tools, equipment and process techniques, instruments, and research into new materials and catalysts, Zhengfei admitted.

The company's CEO also noted that Huawei no longer seeks "to use the best components to make the best products". Instead, it is focusing on using "scientific and reasonable methods" to produce "balanced traffic across the system" and build components for high-quality products. Zhengfei claimed that this approach had "significantly improved" Huawei's profitability.

The company's revenue in the first half of 2021 dropped by $20.5 billion compared to a year earlier, and was lower than in the same periods in 2019 and 2018, according to a Huawei report. The drop follows the US decision to ban the export of American technologies to several Chinese companies, including Huawei, cutting them off from supplies of semiconductors for their smartphones and even Google's Android OS. Washington claims the new policy, introduced under the Trump administration and kept in place by his successor, was prompted by US national security concerns. Huawei and Beijing, however, accused the White House of using an illegal ban to combat competitors of American companies on the technological market.