Company:Huawei

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Short description: Chinese technology company


Huawei Technologies Co., Ltd.
Native name
华为技术有限公司
Huáwéi jìshù yǒuxiàn gōngsī
TypePrivate
ISINHK0000HWEI11
Industry
Founded15 September 1987; 36 years ago (1987-09-15)
Headquarters
Shenzhen
,
China
Area served
Worldwide (exempting United States since 2019)
Key people
Ren Zhengfei (founder & CEO)
Liang Hua (chairman)
Meng Wanzhou (deputy chairwoman & CFO)
Products
BrandsHuawei, Honor (2013–2020)
RevenueIncrease CN¥891.368 billion (US$136.23 billion) (2020)[1]
Decrease CN¥72.501 billion (US$11.08 billion) (2020)
Increase CN¥64.649 billion (US$9.88 billion) (2020)
Total assetsIncrease CN¥876.854 billion (US$134.01 billion) (2020)
Total equityIncrease CN¥330.408 billion (US$50.49 billion) (2020)
Number of employees
197,000 (2020)[1]
ParentHuawei Investment & Holding[2]
SubsidiariesHonor (2013–2020)
Amartus
Caliopa
Chinasoft International
FutureWei Technologies
HexaTier
HiSilicon
iSoftStone
Websitewww.huawei.com
Footnotes / references
[3]
Huawei
Script error: No such module "Infobox multi-lingual name".

Huawei Technologies Co., Ltd. (/ˈhwɑːweɪ/ WHAH-way; Chinese: 华为; pinyin: About this soundHuáwéi) is a China multinational technology corporation headquartered in Shenzhen, Guangdong, China. It designs, develops, and sells telecommunications equipment and consumer electronics.[4]

The corporation was founded in 1987 by Ren Zhengfei, a former Deputy Regimental Head in the People's Liberation Army.[5] Initially focused on manufacturing phone switches, Huawei has expanded its business to include building telecommunications networks, providing operational and consulting services and equipment to enterprises inside and outside of China, and manufacturing communications devices for the consumer market.[6][7] Huawei has over 194,000 employees (As of December 2019 ).[8]

Huawei has deployed its products and services in more than 170 countries and areas.[9] It overtook Ericsson in 2012 as the largest telecommunications equipment manufacturer in the world,[10] and overtook Apple in 2018 as the second-largest manufacturer of smartphones in the world, behind Samsung Electronics.[11] In 2018, Huawei reported that its annual revenue was US$108.5 billion.[12] In July 2020, Huawei surpassed Samsung and Apple to become the top smartphone brand (in number of phones shipped) in the world for the first time.[13] This was primarily due to a drop in Samsung's global sales in the second quarter of 2020, owing to the impact of the COVID-19 pandemic.[13][14][15][4]

Although successful internationally, Huawei has faced difficulties in some markets, due to claims of undue state support, links to the People's Liberation Army, and cybersecurity concerns—primarily from the United States government—that Huawei's infrastructure equipment may enable surveillance by the Chinese government.[16][17] With the development of 5G wireless networks, there have been calls from the U.S. and its allies to not do any kind of business with Huawei or other Chinese telecommunications companies such as ZTE.[18] Huawei has argued that its products posed "no greater cybersecurity risk" than those of any other vendor and that there is no evidence of the U.S. espionage claims.[19] Questions regarding Huawei's ownership and control as well as concerns regarding the extent of state support also remain.[16] Huawei has also been accused of assisting in the surveillance and mass detention of Uyghurs in the Xinjiang internment camps, which have resulted in sanctions by the United States Department of State.[20][21][22] Huawei tested facial recognition AI capable of recognizing ethnicity-specific features to alert government authorities to members of the ethnic group.[23]

In the midst of an ongoing trade war between China and the United States, Huawei was restricted from doing commerce with U.S. companies due to alleged previous willful violations of U.S. sanctions against Iran. On 29 June 2019, U.S. President Donald Trump reached an agreement to resume trade talks with China and announced that he would ease the aforementioned sanctions on Huawei. Huawei cut 600 jobs at its Santa Clara research center in June, and in December 2019 founder Ren Zhengfei said it was moving the center to Canada because the restrictions would block them from interacting with US employees.[24][25] On 17 November 2020, according to technology blog Engadget, Huawei agreed to sell the Honor brand to Shenzen Zhixin New Information Technology to "ensure its survival", after the US sanctions against them.[26] On July 23, 2021, Huawei reportedly hired Tony Podesta as a consultant and lobbyist, with a goal of nurturing the company's relationship with the Biden administration.[27][28]

Name

According to the company founder Ren Zhengfei, the name Huawei comes from a slogan he saw on a wall, Zhonghua youwei meaning "China has promise" (Chinese: 中华有为; pinyin: Zhōng huá yǒu wéi), when he was starting up the company and needed a name.[29] Zhonghua or Hua means China,[30] while youwei means "promising/to show promise".[31][32] Huawei has also been translated as "splendid achievement" or "China is able", which are possible readings of the name.[33] In Chinese pinyin, the name is Huáwéi,[34] and pronounced [xwǎwéi] in Mandarin Chinese; in Cantonese, the name is transliterated with Jyutping as Waa4-wai4 and pronounced [wȁːwɐ̏i]. However, pronunciation of Huawei by non-Chinese varies in other countries, for example "Hoe-ah-wei" in Belgium and the Netherlands.[35] The company had considered changing the name in English out of concern that non-Chinese people may find it hard to pronounce,[36] but decided to keep the name, and launched a name recognition campaign instead to encourage a pronunciation closer to "Wah-Way" using the words "Wow Way".[37][38]

History

Early years

During the 1980s, the Chinese government tried to modernize the country's underdeveloped telecommunications infrastructure. A core component of the telecommunications network was telephone exchange switches, and in the late 1980s, several Chinese research groups endeavored to acquire and develop the technology, usually through joint ventures with foreign companies.

Ren Zhengfei, a former deputy director of the People's Liberation Army engineering corps, founded Huawei in 1987 in Shenzhen. The company reports that it had RMB 21,000 (about $5,000 at the time) in registered capital from Ren Zhengfei and five other investors at the time of its founding where each contributed RMB 3,500.[39] They include Mei Zhongxing, manager at Shenzhen Sanjiang Electronics Co.; Zhang Xiangyang, a member of the Shenzhen Bureau of Development Planning; Wu Huiqing, an accountant at Shenzhen Petrochemical Co.; Shen Dingzing, a manager at Zhuhai Communications Equipment Manufacturing Co.; and Chen Jinyang, a manager in the trade department of the state-run China Travel Service in Shenzhen. These five initial investors gradually withdrew their investments in Huawei.

Ren sought to reverse engineer foreign technologies with local researchers. At a time when all of China's telecommunications technology was imported from abroad, Ren hoped to build a domestic Chinese telecommunication company that could compete with, and ultimately replace, foreign competitors.[40]

During its first several years the company's business model consisted mainly of reselling private branch exchange (PBX) switches imported from Hong Kong.[6][41] Meanwhile, it was reverse-engineering imported switches and investing heavily in research and development to manufacture its own technologies.[6] By 1990 the company had approximately 600 R&D staff and began its own independent commercialization of PBX switches targeting hotels and small enterprises.[42]

The company's first major breakthrough came in 1993 when it launched its C&C08 program controlled telephone switch. It was by far the most powerful switch available in China at the time. By initially deploying in small cities and rural areas and placing emphasis on service and customizability, the company gained market share and made its way into the mainstream market.[43]

Huawei also won a key contract to build the first national telecommunications network for the People's Liberation Army, a deal one employee described as "small in terms of our overall business, but large in terms of our relationships".[44] In 1994, founder Ren Zhengfei had a meeting with Party general secretary Jiang Zemin, telling him that "switching equipment technology was related to national security, and that a nation that did not have its own switching equipment was like one that lacked its own military." Jiang reportedly agreed with this assessment.[6]

In the 1990s Canadian telecom giant Nortel outsourced production of their entire product line to Huawei.[45] [dubious – discuss] They subsequently outsourced much of their product engineering to Huawei as well.[46] [dubious – discuss]

Another major turning point for the company came in 1996 when the government in Beijing adopted an explicit policy of supporting domestic telecommunications manufacturers and restricting access to foreign competitors. Huawei was promoted by both the government and the military as a national champion, and established new research and development offices.[6]

Foreign expansion

Huawei Offices
In Voorburg, Netherlands
In Markham, Ontario, Canada

In 1997, Huawei won a contract to provide fixed-line network products to Hong Kong company Hutchison Whampoa.[43] Later that year, Huawei launched its wireless GSM-based products and eventually expanded to offer CDMA and UMTS. In 1999, the company opened a research and development (R&D) center in Bangalore, India to develop a wide range of telecom software.[42]

In May 2003, Huawei partnered with 3Com on a joint venture known as H3C, which was focused on enterprise networking equipment. It marked 3Com's re-entrance into the high-end core routers and switch market, after having abandoned it in 2000 to focus on other businesses. 3Com bought out Huawei's share of the venture in 2006 for US$882 million.[47][48]

In 2004, Huawei signed a $10 billion credit line with the China Development Bank (CDB) to provide low-cost financing to customers buying its telecommunications equipment to support its sales outside of China. This line of credit was tripled to $30 billion in 2009.[49]

In 2005, Huawei's foreign contract orders exceeded its domestic sales for the first time. Huawei signed a global framework agreement with Vodafone. This agreement marked the first time a telecommunications equipment supplier from China had received Approved Supplier status from Vodafone Global Supply Chain.[50][non-primary source needed] Huawei also signed a contract with British Telecom (BT) for the deployment of its multi-service access network (MSAN) and transmission equipment for BT's 21st Century Network (21CN).[citation needed]

In 2007, Huawei began a joint venture with U.S. security software vendor Symantec Corporation, known as Huawei Symantec, which aimed to provide end-to-end solutions for network data storage and security. Huawei bought out Symantec's share in the venture in 2012, with The New York Times noting that Symantec had fears that the partnership "would prevent it from obtaining United States government classified information about cyber threats".[51]

In May 2008, Australian carrier Optus announced that it would establish a technology research facility with Huawei in Sydney.[52] In October 2008, Huawei reached an agreement to contribute to a new GSM-based HSPA+ network being deployed jointly by Canadian carriers Bell Mobility and Telus Mobility, joined by Nokia Siemens Networks.[53] In November 2020, Telus dropped the plan to build 5G network with Huawei.[54] Huawei delivered one of the world's first LTE/EPC commercial networks for TeliaSonera in Oslo, Norway in 2009.[42]

In July 2010, Huawei was included in the Global Fortune 500 2010 list published by the U.S. magazine Fortune for the first time, on the strength of annual sales of US$21.8 billion and net profit of US$2.67 billion.[55][56]

In October 2012, it was announced that Huawei would move its UK headquarters to Green Park, Reading, Berkshire.[57]

Huawei also has expanding operations in Ireland since 2016. As well as a headquarters in Dublin, it has facilities in Cork and Westmeath.[58]

Its Irish operations include communications, administration, marketing, consumer business and sales functions.

The company also partners key Science Foundation Ireland centres such as Connect, Insight, Adapt and Lero.

In September 2017, Huawei created a Narrowband IoT city-aware network using a "one network, one platform, N applications" construction model utilizing 'Internet of things' (IoT), cloud computing, big data, and other next-generation information and communications technology, it also aims to be one of the world's five largest cloud players in the near future.[59][60]

In April 2019, Huawei established the Huawei Malaysia Global Training Centre (MGTC) at Cyberjaya, Malaysia,[61] which is Huawei's first training center outside of China.

Recent performance

Huawei expo at IFA 2018 in Berlin

By 2018, Huawei had sold 200 million smartphones.[62] They reported that strong consumer demand for premium range smart phones helped the company reach consumer sales in excess of $52 billion in 2018.[63]

Huawei announced worldwide revenues of $105.1 billion for 2018, with a net profit of $8.7 billion.[64] Huawei's Q1 2019 revenues were up 39% year-over-year, at US$26.76 billion.[65]

In 2019, Huawei reported revenue of US$122 billion.[66]

By the second quarter of 2020, Huawei had become the world's top smartphone seller, overtaking Samsung for the first time.[13]

Corporate affairs

Huawei classifies itself as a "collective" entity and prior to 2019 did not refer to itself as a private company. Richard McGregor, author of The Party: The Secret World of China's Communist Rulers, said that this is "a definitional distinction that has been essential to the company's receipt of state support at crucial points in its development".[67] McGregor argued that "Huawei's status as a genuine collective is doubtful."[67] Huawei's position has shifted in 2019 when, Dr. Song Liuping, Huawei's chief legal officer, commented on the US government ban, said: "Politicians in the US are using the strength of an entire nation to come after a private company." (emphasis added).[68]

Leadership

Ren Zhengfei is the founder and CEO of Huawei and has the power to veto any decisions made by the board of directors.[69][70]

Board of Directors

Huawei disclosed its list of board of directors for the first time in 2010.[71] Liang Hua is the current chair of the board. (As of 2019), the members of the board are Liang Hua, Guo Ping, Xu Zhijun, Hu Houkun, Meng Wanzhou (CFO and deputy chairwoman), Ding Yun, Yu Chengdong, Wang Tao, Xu Wenwei, Shen-Han Chiu, Chen Lifang, Peng Zhongyang, He Tingbo, Li Yingtao, Ren Zhengfei, Yao Fuhai, Tao Jingwen, and Yan Lida.[72]

Executives

Guo Ping is the Chairman of Huawei Device, Huawei's mobile phone division.[73] Huawei's Chief Ethics & Compliance Officer is Zhou Daiqi[74] who is also Huawei's Communist Party Committee Secretary.[75] Their Chief legal officer is Song Liuping.[68]

Ownership

Huawei claims it is an employee-owned company, but it remains a point of dispute.[69][76] Ren Zhengfei retains approximately 1 percent of the shares of Huawei's holding company, Huawei Investment & Holding,[76] with the remainder of the shares held by a trade union committee (not a trade union per se, and the internal governance procedures of this committee, its members, its leaders or how they are selected all remain undisclosed to the public) that is claimed to be representative of Huawei's employee shareholders.[69][77] The company's trade union committee is registered with and pay dues to the Shenzhen federation of the All-China Federation of Trade Unions, which is controlled by the Chinese Communist Party.[78] This is also due to a limitation in Chinese law preventing limited liability companies from having more than 50 shareholders.[79] About half of Huawei staff participate in this scheme (foreign employees are not eligible), and hold what the company calls "virtual restricted shares". These shares are non-tradable and are allocated to reward performance.[80] When employees leave Huawei, their shares revert to the company, which compensates them for their holding.[81] Although employee shareholders receive dividends,[77] their shares do not entitle them to any direct influence in management decisions, but enables them to vote for members of the 115-person Representatives' Commission from a pre-selected list of candidates.[77] The Representatives' Commission selects Huawei Holding's board of directors and Board of Supervisors.[82]

Scholars have found that, after a few stages of historical morphing, employees do not own a part of Huawei through their shares. Instead, the "virtual stock is a contract right, not a property right; it gives the holder no voting power in either Huawei Tech or Huawei Holding, cannot be transferred, and is cancelled when the employee leaves the firm, subject to a redemption payment from Huawei Holding TUC at a low fixed price".[83][69] The same scholars added, "given the public nature of trade unions in China, if the ownership stake of the trade union committee is genuine, and if the trade union and its committee function as trade unions generally function in China, then Huawei may be deemed effectively state-owned."[69]

In September 2019 Huawei filed a defamation lawsuit against a France researcher and a television show which had hosted her.[84] The researcher, with the Foundation for Strategic Research, had noted that Ren Zhengfei was a former PLA member and that Huawei functions as an arm of the Chinese government.[85] This was the first time Huawei had sued a researcher for defamation.[86]

Partners

(As of 2010 ), approximately 80% of the world's top 50 telecoms companies had worked with Huawei.[87]

Prominent partners include:

Since 2016, German camera company Leica has established a partnership with Huawei, and Leica cameras will be co-engineered into Huawei smartphones, including the P and Mate Series. The first smartphone to be co-engineered with a Leica camera was the Huawei P9.[97]

In August 2019, Huawei collaborated with eyewear company Gentle Monster and released smartglasses.[98] In November 2019, Huawei partners with Devialet and unveiled a new specifically designed speaker, the Sound X. [99]

In 2020, Huawei partnered with Dutch navigation device company TomTom for an alternative to Google Maps.[100]

Products and services

Huawei is organized around three core business segments:[101]

  • Carrier Network Business Group – provides wireless networks, fixed networks, global services, carrier software, core networks and network energy solutions that are deployed by communications carriers
  • Enterprise Business Group – Huawei's industry sales team
  • Consumer Business Group – the core of this group is "1 + 8 + N" where "1" represents mobile phones; "8" represents tablets, PCs, VR devices, wearables, smart screens, smart audio, smart speakers, and head units; and "N" represents ubiquitous Internet of Things (IoT) devices[102]
  • Cloud & AI Business Group - Huawei's server, storage products and cloud services

Huawei announced its Enterprise business in January 2011 to provide network infrastructure, fixed and wireless communication, data center, and cloud computing for global telecommunications customers.[103]

Telecommunication networks

Huawei offers mobile and fixed softswitches, plus next-generation home location register and Internet Protocol Multimedia Subsystems (IMS). Huawei sells xDSL, passive optical network (PON) and next-generation PON (NG PON) on a single platform. The company also offers mobile infrastructure, broadband access and service provider routers and switches (SPRS). Huawei's software products include service delivery platforms (SDPs), BSSs, Rich Communication Suite and digital home and mobile office solutions[buzzword].[104]

Global services

Huawei Global Services provides telecommunications operators with equipment to build and operate networks as well as consulting and engineering services to improve operational efficiencies.[105] These include network integration services such as those for mobile and fixed networks; assurance services such as network safety; and learning services, such as competency consulting.[104]

Devices

Huawei's Devices division provides white-label products to content-service providers, including USB modems, wireless modems and wireless routers for mobile Wi-Fi,[106] embedded modules, fixed wireless terminals, wireless gateways, set-top boxes, mobile handsets and video products.[107] Huawei also produces and sells a variety of devices under its own name, such as the IDEOS smartphones, tablet PCs and Huawei Smartwatch.[108][109]

Phones

Main page: Engineering:List of Huawei phones

Huawei is the second-biggest smartphone maker in the world, after Samsung, as of the first quarter of 2019. Their portfolio of phones includes both high-end smartphones, its Huawei Mate series and Huawei P series, and cheaper handsets that fall under its Honor brand.[110]

History of Huawei phones

The Huawei P30 with rear triple-lens Leica optics camera

In July 2003, Huawei established their handset department and by 2004, Huawei shipped their first phone, the C300. The U626 was Huawei's first 3G phone in June 2005 and in 2006, Huawei launched the first Vodafone-branded 3G handset, the V710. The U8220 was Huawei's first Android smartphone and was unveiled in MWC 2009. At CES 2012, Huawei introduced the Ascend range starting with the Ascend P1 S. At MWC 2012, Huawei launched the Ascend D1. In September 2012, Huawei launched their first 4G ready phone, the Ascend P1 LTE. At CES 2013, Huawei launched the Ascend D2 and the Ascend Mate. At MWC 2013, the Ascend P2 was launched as the world's first LTE Cat4 smartphone. In June 2013, Huawei launched the Ascend P6 and in December 2013, Huawei introduced Honor as a subsidiary independent brand in China. At CES 2014, Huawei launched the Ascend Mate2 4G in 2014 and at MWC 2014, Huawei launched the MediaPad X1 tablet and Ascend G6 4G smartphone. Other launched in 2014 included the Ascend P7 in May 2014, the Ascend Mate7, the Ascend G7 and the Ascend P7 Sapphire Edition as China's first 4G smartphone with a sapphire screen.[111]

In January 2015, Huawei discontinued the "Ascend" brand for its flagship phones, and launched the new P series with the Huawei P8.[112][113] Huawei also partnered with Google to build the Nexus 6P in 2015.[citation needed]

In May 2018, Huawei stated that they will no longer allow unlocking the bootloader of their phones to allow installing third party system software or security updates after Huawei stops them. [114]

The current models in the P and Mate lines, the Mate 40, Mate 40 Pro, Mate 40 5G, Mate 40 Pro 5G, P40, P40 Pro, Mate 30, Mate 30 Pro, Mate 30 5G, Mate 30 Pro 5G, P30, P30 Pro, Mate 20, Mate 20 Pro and Mate 20 X were released in 2018 and 2019.[115][116][117][118][119][120]

Laptops

Huawei Matebook 2-in-1 tablet with Windows 10 (26627094621).jpg

In 2016, Huawei entered the laptop markets with the release of its Huawei MateBook series of laptops.[121] They have continued to release laptop models in this series into 2020 with their most recent models being the MateBook X Pro and Matebook 13 2020.[122]

Tablets

The HUAWEI MatePad Pro, launched in November 2019.[102] Huawei is number one in the Chinese tablet market and number two globally as of 4Q 2019.[123]

Wearables

Main page: Engineering:Huawei Watch

The Huawei Watch is an Android Wear-based smartwatch developed by Huawei. It was announced at 2015 Mobile World Congress on 1 March 2015,[124] and was released at Internationale Funkausstellung Berlin on 2 September 2015.[125] It is the first smartwatch produced by Huawei.[125] Their latest watch, the Huawei Watch GT 2e, was launched in India in May, 2020.[126]

Software

EMUI (Emotion User Interface)

Main page: Software:EMUI

Emotion UI (EMUI) is a ROM/OS developed by Huawei Technologies Co. Ltd. and based on Google's Android Open Source Project (AOSP). EMUI is pre-installed on most Huawei Smartphone devices and its subsidiaries the Honor series. The latest version of EMUI is EMUI 11.

Harmony OS

On 9 August 2019, Huawei officially unveiled Harmony OS at its inaugural developers' conference in Dongguan. Huawei described Harmony as a free, microkernel-based distributed operating system for various types of hardware, with faster inter-process communication than QNX or Google's "Fuchsia" microkernel, and real-time resource allocation. The ARK compiler can be used to port Android APK packages to the OS. Huawei stated that developers would be able to "flexibly" deploy Harmony OS software across various device categories; the company focused primarily on IoT devices, including "smart displays", wearable devices, and in-car entertainment systems, and did not explicitly position Harmony OS as a mobile OS.[127][128]

Huawei Mobile Services (HMS)

Huawei Mobile Services (HMS) is Huawei's solution to GMS (Google Mobile services), it was created to work over Android System, so Android applications can work over Huawei HMS Mobile phones, if those don't use Google Mobile Services. HMS is part of Huawei ecosystem which Huawei developed complete solutions for several scenarios. One of their major application is called Huawei AppGallery, which is Huawei app store created as a competitor to Google's Android Play Store. As of December, 2019 it was in version 4.0 and as of 16 January 2020 the company reports it has signed up 55,000 apps using its HMS Core software.[129]

Competitive position

Huawei Technologies Co. Ltd. was the world's largest telecom equipment maker in 2012[10][130] and China's largest telephone-network equipment maker.[131] With 3,442 patents, Huawei became the world's No. 1 applicant for international patents in 2014.[132][133] In 2019, Huawei had the second most patents granted by the European Patent Office.[134]

R&D centers

The company has twenty one R&D institutes in countries including China, the United States,[135] Canada,[136] the United Kingdom,[137] Pakistan, Finland, France, Belgium, Germany, Colombia, Sweden, Ireland, India,[138] Russia, Israel, and Turkey.[139][140]

Huawei is considering opening a new research and development (R&D) center in Russia (2019/2020), which would be the third in the country after the Moscow and St. Petersburg R&D centers. Huawei also announced plans (November 2018) to open an R&D center in the French city of Grenoble, which would be mainly focused on smartphone sensors and parallel computing software development. The new R&D team in Grenoble was expected to grow to 30 researchers by 2020, said the company. The company said that this new addition brought to five the number of its R&D teams in the country: two were located in Sophia Antipolis and Paris, researching image processing and design, while the other two existing teams were based at Huawei's facilities in Boulogne-Billancourt, working on algorithms and mobile and 5G standards. The technology giant also intended to open two new research centers in Zürich and Lausanne, Switzerland. Huawei at the time employed around 350 people in Switzerland.[141][142]

Huawei also funds research partnerships with universities such as the University of British Columbia, the University of Waterloo, the University of Western Ontario, the University of Guelph, and Université Laval.[143][144]

Controversies

Huawei has faced criticism for various aspects of its operations, with its most prominent controversies having involved U.S. allegations of its products containing backdoors for Chinese government espionage—consistent with domestic laws requiring Chinese citizens and companies to cooperate with state intelligence when warranted. Huawei executives have consistently denied these allegations, having stated that the company has never received any requests by the Chinese government to introduce backdoors in its equipment, would refuse to do so, and that Chinese law did not compel them to do so.[145][146][147][148]

Early business practices

Huawei employed a complex system of agreements with local state-owned telephone companies that seemed to include illicit payments to the local telecommunications bureau employees. During the late 1990s, the company created several joint ventures with their state-owned telecommunications company customers. By 1998, Huawei had signed agreements with municipal and provincial telephone bureaus to create Shanghai Huawei, Chengdu Huawei, Shenyang Huawei, Anhui Huawei, Sichuan Huawei, and other companies. The joint ventures were actually shell companies, and were a way to funnel money to local telecommunications employees so that Huawei could get deals to sell them equipment. In the case of Sichuan Huawei, for example, local partners could get 60–70 percent of their investment returned in the form of annual 'dividends'.[149]

Allegations of espionage

Huawei has been at the center of espionage allegations over Chinese 5G network equipment. In 2018, the United States passed a defense funding bill that contained a passage barring the federal government from doing business with Huawei, ZTE, and several Chinese vendors of surveillance products, due to security concerns.[150][151][152] The Chinese government has threatened economic retaliation against countries that block Huawei's market access.[153]

Similarly in November 2018, New Zealand blocked Huawei from supplying mobile equipment to national telecommunications company Spark New Zealand's 5G network, citing a "significant network security risk" and concerns about China's National Intelligence Law.[154][155][156]

Between December 2018 and January 2019, German and British intelligence agencies initially pushed back against the US' allegations, stating that after examining Huawei's 5G hardware and accompanying source code, they have found no evidence of malevolence and that a ban would therefore be unwarranted.[157][158] Additionally, the head of Britain's National Cyber Security Centre (the information security arm of GCHQ) stated that the US has not managed to provide the UK with any proof of its allegations against Huawei.[158]

However, on 14 July 2020, the United Kingdom Government announced a ban on the use of company's 5G network equipment, citing security concerns.[159] In October 2020, the British Defence Select Committee announced that it had found evidence of Huawei's collusion with the Chinese state and that it supported accelerated purging of Huawei equipment from Britain's telecom infrastructure by 2025.[160] In November 2020, Huawei challenged the UK government's decision, citing an Oxford Economics report that it had contributed £3.3 billion to the UK's GDP.[161]

In mid July 2020, Andrew Little, the Minister in charge of New Zealand's signals intelligence agency the Government Communications Security Bureau (GCSB), announced that New Zealand would not join the United Kingdom and United States in banning Huawei from the country's 5G network.[162][163]

Following the 2020 China–India skirmishes, India announced that Huawei would be blocked from participating in the country's 5G network for national security reasons.[164]

On 28 August 2020, French President Emmanuel Macron assured the Chinese government that it did not ban Huawei products from participating in its fifth-generation mobile roll-out, but favored European providers for security reasons. The head of the France's cybersecurity agency also stated that it has granted time-limited waivers on 5G for wireless operators that use Huawei products, a decision that likely started a "phasing out" of the company's products.[165]

In 2019, a report commissioned by the Papua New Guinea (PNG) National Cyber Security Centre, funded by the Australia , alleged that a data center built by Huawei for the PNG government contained exploitable security flaws.[166] Huawei responded that the project "complies with appropriate industry standards and the requirements of the customer."[166] The Government of Papua New Guinea has called the data centre a 'failed investment' and attempted to have the loan cancelled.[167]

In February 2020, US government officials claimed that Huawei has had the ability to covertly exploit backdoors intended for law enforcement officials in carrier equipment like antennas and routers since 2009.[168][169]

Allegations of fraud and conspiracy to subvert sanctions against Iran

In December 2012, Reuters reported that "deep links" existed as early as 2010 between Huawei through Meng Wanzhou (who was then CFO of the firm) and an Iranian telecom importer named Skycom.[170] The US had long-standing sanctions on Iran, including against the importation of US technology goods into Iran. On 22 August 2018, the Trump administration and a New York court, including staffers of Trump's cabinet officially issued an arrest warrant for Meng to stand trial in the United States.[171][172] On 1 December 2018, Meng was arrested in Canada at the behest of the Trump administration.[173] She faces extradition to the United States on charges of violating the sanctions regime.[174]

On 28 January 2019, the Trump administration's cabinet and federal prosecutors formally indicted Meng and Huawei with 13 counts of bank and wire fraud (in order to mask the sale that is illegal under sanctions of U.S. technology to Iran), obstruction of justice, and misappropriating trade secrets.[175][176] The department also filed a formal extradition request for Meng with Canadian authorities that same day. Huawei responded to the charges and said that it "denies that it or its subsidiary or affiliate have committed any of the asserted violations", as well as asserted Meng was similarly innocent. The China Ministry of Industry and Information Technology believed the charges brought on by the United States were "unfair".[177]

The case for extradition of Meng to the US to face charges is ongoing as of May, 2020 with the B.C. Supreme Court judge on 27 May 2020 ruling that extradition proceedings against the Huawei executive should proceed, denying the claim of double criminality brought by Meng's defense team.[178] On September 24th, 2021, the Department of Justice announced it had suspended its charges against Meng Wanzhou after she entered into a deferred prosecution agreement with them in which she conceded she helped misrepresent the relationship between Huawei and its subsidiary Skycom to HSBC in order to transact business with Iran, but did not have to plead guilty to the fraud charges. [179] The Department of Justice will move to withdraw all the charges against Meng when the deferral period ends on December 21,2022, on the condition that she is not charged with a crime before then. [179]

Allegations of intellectual property theft

Huawei has been accused of various instances of intellectual property theft against parties such as Nortel,[180][dubious – discuss] Cisco Systems, and T-Mobile US (where a Huawei employee had photographed a robotic arm used to stress-test smartphones and taken a fingertip from the robot).[181][182][183] The management of the company claims the US government persecutes it because Huawei's expansion can affect American business interests.[184] In August 2018, a Texas court found that Huawei had infringed on patents held by the American firm PanOptis.[185] Huawei later settled the case.[186] In November 2018, a German court ruled against Huawei and ZTE in a patent infringement case.[187] In February 2020, the United States Department of Justice charged Huawei with racketeering and conspiring to steal trade secrets from six U.S. firms.[188][189]

In 2019 Huawei's chief legal officer stated "In the past 30 years, no court has ever concluded that Huawei engaged in malicious IP theft...no company can become a global leader by stealing from others."[190]

Involvement in North Korea

Documents leaked in 2019 revealed that Huawei "secretly helped the North Korean government build and maintain the country's commercial wireless network," possibly in violation of international sanctions.[191]

Allegations of involvement in Xinjiang internment camps

In 2019, the Australian Strategic Policy Institute, a think tank funded by the Australian and US governments and US weapons manufacturers, accused Huawei of assisting in the mass detention of Uyghurs in Xinjiang internment camps.[20][21][192] Huawei technology used by the Xinjiang internal security forces for data analysis,[193] and companies supplying Huawei operating in the Xinjiang region are accused of using forced labour.[194] However, Huawei denied these reports.[195] In January 2021, it was reported that Huawei previously filed a patent with the China National Intellectual Property Administration for a technology to identify Uyghur pedestrians.[196]

Allegations of collusion between Huawei and the Chinese Communist Party apparatus

On 7 October 2020, the U.K. Parliament's Defence Committee released a report claiming that there was evidence of collusion between Huawei and Chinese state and the Chinese Communist Party. The U.K. Parliament's Defence Committee said that the conclusion was evidenced by Huawei's ownership model and government subsidies it has received. Huawei responded by saying "this report lacks credibility as it is built on opinion rather than fact".[197]

U.S. business restrictions

In August 2018, the National Defense Authorization Act for Fiscal Year 2019 (NDAA 2019) was signed into law, containing a provision that banned Huawei and ZTE equipment from being used by the U.S. federal government, citing security concerns.[198] Huawei filed a lawsuit over the act in March 2019,[199] alleging it to be unconstitutional because it specifically targeted Huawei without granting it a chance to provide a rebuttal or due process.[200]

Additionally, on 15 May 2019, the Department of Commerce added Huawei and 70 foreign subsidiaries and "affiliates" to its Entity List under the Export Administration Regulations, citing the company having been indicted for "knowingly and willfully causing the export, re-export, sale and supply, directly and indirectly, of goods, technology and services (banking and other financial services) from the United States to Iran and the government of Iran without obtaining a license from the Department of Treasury's Office of Foreign Assets Control (OFAC)".[201] This restricts U.S. companies from doing business with Huawei without a government license.[202][203][204][205] Various U.S.-based companies immediately froze their business with Huawei to comply with the regulation.[206]

The May 2019 ban on Huawei was partial: it did not affect most non-American produced chips, and the Trump administration granted a series of extensions on the ban in any case,[207] with another 90-day repreive issued in May 2020.[208] In May 2020, the U.S. extended the ban to cover semiconductors customized for Huawei and made with U.S. technology.[209] In August 2020, the U.S. again extended the ban to a blanket ban on all semiconductor sales to Huawei.[209] The blanket ban took effect in September 2020.[210]

These actions have negatively affected Huawei production, sales and financial projections.[211][212][213] However, on 29 June 2019 at the G20 summit, the US President made statements implicating plans to ease the restrictions on U.S. companies doing business with Huawei.[214][215][216] Despite this statement, on 15 May 2020, the U.S. Department of Commerce extended its export restrictions to bar Huawei from producing semiconductors derived from technology or software of U.S. origin, even if the manufacturing is performed overseas.[217][218][219] In June 2020, the Federal Communications Commission (FCC) designated Huawei a national security threat, thereby barring it from any U.S. subsidies.[18] In July 2020, the Federal Acquisition Regulation Council published a Federal Register notice prohibiting all federal government contractors from selling Huawei hardware to the federal government and preventing federal contractors from using Huawei hardware.[220]

In November 2020, Donald Trump issued an executive order prohibiting any American company or individual from owning shares in companies that the United States Department of Defense has listed as having links to the People's Liberation Army, which included Huawei.[221][222][223] In January 2021, the Trump administration revoked licenses from US companies such as Intel from supplying products and technologies to Huawei.[224] In June 2021, the FCC voted unanimously to prohibit approvals of Huawei gear in U.S. telecommunication networks on national security grounds.[225]

In June 2021, the administration of Joe Biden began to persuade the United Arab Emirates to remove the Huawei Technologies Co. equipment from its telecommunications network, while ensuring to further distance itself from China. It came as an added threat to the $23 billion arms deal of F-35 fighter jets and Reaper drones between the US and the UAE. The Emirates got a deadline of four years from Washington to replace the Chinese network.[226]

A report in September 2021 analyzed how the UAE was struggling between maintaining its relations with both the United States and China. While Washington had a hawkish stance towards Beijing, the increasing Emirati relations with China have strained those with America. In that light, the Western nation has raised concerns for the UAE to beware of the security threat that the Chinese technologies like Huawei 5G telecommunications network possessed. However, the Gulf nations like the Emirates and Saudi Arabia defended their decision of picking Chinese technology over the American, saying that it is much cheaper and had no political conditions.[227]

Canadian response

On 18 November 2020, an opposition motion calling on the government for a decision on the participation of Huawei in Canada's 5G network and a plan on combating what it called "Chinese aggression" passed 179 to 146. The non-binding motion was supported by the NDP and Bloc Québécois.[228]

Huawei's response and stockpiling

Before the 15 September 2020 deadline, Huawei was in "survival mode" and stockpiled "5G mobile processors, Wifi, radio frequency and display driver chips and other components" from key chip suppliers and manufacturers, including Samsung, SK Hynix, TSMC, MediaTek, Realtek, Novatek, and RichWave.[210] Even in 2019, Huawei spent $23.45 billion on the stockpiling of chips and other supplies in 2019, up 73% from 2018.[210]

On its most crucial business, namely, its telecoms business (including 5G) and server business, Huawei has stockpiled 1.5 to 2 years' worth of chips and components.[229] It began massively stockpiling from 2018, when Meng Wanzhou, the daughter of Huawei's founder, was arrested in Canada upon U.S. request.[229] Key Huawei suppliers included Xilinx, Intel, AMD, Samsung, SK Hynix, Micron and Kioxia.[229] On the other hand, analysts predicted that Huawei could ship 195 million units of smartphones from its existing stockpile in 2021, but shipments may drop to 50 million in 2021 if rules are not relaxed.[210]

In late 2020, it was reported that Huawei plans to build a semiconductor manufacturing facility in Shanghai that does not involve U.S. technology.[230] The plan may help Huawei obtain necessary chips after its existing stockpile becomes depleted, which helps it chart a sustainable path for its telecoms business.[230] Huawei plans to collaborate with the government-run Shanghai IC R&D Center, which is partially owned by the state-owned enterprise Huahong Group.[230] Huawei may be purchasing equipment from Chinese firms such as AMEC and Naura, as well as using foreign tools which it can still find on the market.[230]

Replacement operating systems (Deepin & Harmony OS)

During the sanctions, it was noted that Huawei had been working on its own in-house operating system codenamed "HongMeng OS": in an interview with Die Welt, executive Richard Yu stated that an in-house OS could be used as a "plan B" if it were prevented from using Android or Windows as the result of U.S. action.[231][232][233] Huawei filed trademarks for the names "Ark", "Ark OS", and "Harmony" in Europe, which were speculated to be connected to this OS.[234][235] On 9 August 2019, Huawei officially unveiled Harmony OS at its inaugural developers' conference in Dongguan with the ARK compiler which can be used to port Android APK packages to the OS.[127][128]

In September 2019, Huawei began offering the Linux distribution Deepin as a pre-loaded operating system on selected Matebook models in China.[236]

See also

References

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  204. ↑ Kuo, Lily; Siddiqui, Sabrina (2019-05-16). "Huawei hits back over Trump's national emergency on telecoms 'threat'" (in en-GB). The Guardian (Washington). ISSN 0261-3077. https://www.theguardian.com/us-news/2019/may/15/donald-trump-national-emergency-telecoms-threats-huawei. 
  205. ↑ "US places China's Huawei and 70 affiliates on trade blacklist". 16 May 2019. https://www.scmp.com/news/china/article/3010403/us-commerce-department-places-chinas-huawei-and-70-affiliates-trade. 
  206. ↑ Satariano, Adam; Zhong, Raymond; Wakabayashi, Daisuke (2019-05-20). "U.S. Tech Suppliers, Including Google, Restrict Dealings With Huawei After Trump Order" (in en-US). The New York Times. ISSN 0362-4331. https://www.nytimes.com/2019/05/20/technology/google-android-huawei.html. 
  207. ↑ "Trump administration grants 90-day extension for US businesses to work with Huawei" (in en). 2019-11-18. https://www.cnbc.com/2019/11/18/us-grants-90-day-extension-for-work-with-huawei.html. 
  208. ↑ Keane, Sean. "Huawei ban timeline: Chinese company's CFO to testify in extradition case" (in en). https://www.cnet.com/news/huawei-ban-full-timeline-us-restrictions-china-trump-android-google-ban-5g-cfo/. 
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  211. ↑ Doffman, Zak. "Huawei Stops Smartphone Production Lines After Blacklisting, Report Claims". https://www.forbes.com/sites/zakdoffman/2019/05/31/huawei-cuts-smartphone-production-lines-after-blacklisting-reports-claim/. 
  212. ↑ Doffman, Zak. "Huawei Confirms $30 Billion Revenue Hit As Smartphone Sales Drop 40–60% (Updated)". https://www.forbes.com/sites/zakdoffman/2019/06/17/huawei-may-pull-honor-20-and-fears-40-60-drop-in-smartphone-sales-report-claims/. 
  213. ↑ "Huawei Braces for Phone Sales Drop of Up to 60 Million Overseas". Bloomberg.com. 16 June 2019. https://www.bloomberg.com/news/articles/2019-06-16/huawei-braces-for-a-steep-drop-in-overseas-smartphone-sales. 
  214. ↑ Miller, Matthew. "President Trump lifts US ban on Huawei at G20 summit" (in en). https://www.zdnet.com/article/president-trump-lifts-us-ban-on-huawei-at-g20-summit/. 
  215. ↑ "US and China agree to restart trade talks" (in en-GB). 2019-06-29. https://www.bbc.com/news/world-48810070. 
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  220. ↑ "Federal Acquisition Regulation: Prohibition on Contracting With Entities Using Certain Telecommunications and Video Surveillance Services or Equipment" (in en). 2020-07-14. https://www.federalregister.gov/documents/2020/07/14/2020-15293/federal-acquisition-regulation-prohibition-on-contracting-with-entities-using-certain. 
  221. ↑ Chen, Shawna (12 November 2020). "Trump bans Americans from investing in 31 companies with links to Chinese military". Axios. https://www.axios.com/china-military-trump-investments-ban-a0458e29-2245-4bde-920b-d1c6bc698370.html. 
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  226. ↑ "Biden Prods UAE to Dump Huawei, Sowing Doubts on Key F-35 Sale". Bloomberg.com. 11 June 2021. https://www.bloomberg.com/news/articles/2021-06-11/biden-prods-uae-to-dump-huawei-sowing-doubts-on-key-f-35-sale. 
  227. ↑ England, Andrew; Kerr, Simeon (20 September 2021). "'More of China, less of America': how superpower fight is squeezing the Gulf". https://www.ft.com/content/4f82b560-4744-4c53-bf4b-7a37d3afeb13. Retrieved 20 September 2021. 
  228. ↑ Connolly, Amanda (2020-11-18). "Tory motion calling for action on Huawei, plan to combat Chinese aggression passes". Global News. https://globalnews.ca/news/7470672/conservative-motion-china-huawei/. 
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  231. ↑ "Huawei confirms it has its own OS on back shelf as a plan B". 14 March 2019. https://www.scmp.com/tech/big-tech/article/3001685/huawei-confirms-it-has-built-its-own-operating-system-just-case-us. 
  232. ↑ Faulkner, Cameron (14 March 2019). "Huawei developed its own operating systems in case it's banned from using Android and Windows". https://www.theverge.com/2019/3/14/18265646/huawei-operating-systems-android-windows-ban. 
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  234. ↑ phones, John McCann 2019-05-28T09:07:56Z Mobile (28 May 2019). "Huawei may be building an Ark (OS) as it prepares for life after Android" (in en). https://www.techradar.com/news/huawei-may-be-building-an-ark-os-as-it-prepares-for-life-after-android. 
  235. ↑ Lakshmanan, Ravie (2019-07-15). "Huawei wants to name its Android OS replacement 'Harmony' in Europe" (in en-us). https://thenextweb.com/plugged/2019/07/15/huawei-wants-to-name-its-android-os-replacement-harmony-in-europe/. 
  236. ↑ "Huawei selling MateBook laptops with Linux preinstalled to consumers in China" (in en). https://www.techrepublic.com/article/huawei-selling-matebook-laptops-with-linux-preinstalled-to-consumers-in-china/. 

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