In the face of enormous pressure from the United States, Huawei is increasing its investment in domestic technology industry, including increasing its stake in semiconductor and other technology companies to support its supply chain.
According to public records, Huawei established Hubble Technology Investment Co., Ltd. in April 2019, since August last year, it has completed 17 transactions to invest in Chinese technology companies.
The investment unit was set up in response to U.S. Huawei restrictions, including cutting off many overseas chip supplies, effectively preventing Huawei from making their own chips. Guo Ping said:
Huawei's investment efforts coincide with the government's efforts to boost China's semiconductor industry. While these investments may help Huawei in the future, analysts say they have so far done little to address supply chain gaps.
A Chinese chip investor said: And it will take a long time to work, but Huawei don't have many good choices, so we have to turn to outward investment.
Most of Hubble's investment targets are chip related Chinese start-ups, some of which have become part of Huawei's supply chain。 For example, Zonghui Xinguang, which was founded in 2015, received investment from Huawei this year to produce VCSEL sensors that support camera face recognition technology. The company didn't immediately respond to a request for comment, but investors said the sensor was used in a number of Huawei phones.
However, many enterprises supported by Huawei are in the early stages of development. Evan EqualOcean, analyst at research firm tracking the Chinese chip industry
For example, Wuxi Haoda Electronics Co., Ltd., which makes RF filters to support wireless communications, has not yet achieved compatibility with advanced 5g mobile phones, and the company received investment from Hubble in January.
This year, we also received investment from Harper, which makes analog-to-digital converters (ADCs) for wireless network base stations. The U.S. company dominates this segment, according to a pre IPO prospectus released by srip prior to its listing in Shanghai. The company generated only 300 million yuan (US $43.99 million) in revenue last year. Snape did not immediately respond to an email requesting comment.
Harbert's portfolio also includes companies outside HUAWEI's core telecommunications business, and several investments in chips, raw materials and battery technology companies demonstrate their ambitions for autopilot.
At the end of last month, the company also completed its investment in open source China of Shenzhen company, behind which is gitee, a Chinese competitor of GitHub, an American coding platform. Code cloud did not immediately respond to an email requesting comment. According to the filing documents, Hubble usually buys 5-10% of the target's shares, although the valuation has not been disclosed.
The recent investment marks a change in Huawei's strategy to increase the frequency of such deals and to refocus on its domestic business rather than on overseas companies. In 2013, for example, Huawei acquired calopia, a optoelectronic company based in Ghent, Belgium. The following year, it acquired neul, a UK Internet of things chip maker.
A former Huawei employee searching for the target said:Huawei likes to do its own research and development, so the investment or acquisition is only carried out when it is absolutely necessary, and it has also tended to invest in American or European technology companies in the past.
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