Huawei to raise minimum annual R&D spending to at least US$15 billion – SCMP
What happened: Huawei will increase its research and development (R&D) spending to between $15 billion and $20 billion annually. The increased budget will allow its R&D department to dedicate 20 to 30% of its financial resources to basic scientific research. The company spent a total of RMB 89.7 billion (US$13.2 billion) on research last year, accounting for 14.9% of its total revenue. It already has a huge team focussed on the development of new technologies, with around 45% of its employees engaging in R&D-related activities.
Why it’s important: The increase in R&D spending comes as Huawei is experiencing resistance in overseas markets. The US, UK, and Australia have all voiced concerns about the company’s technology on security grounds. Despite this, Huawei hopes to spearhead the development and deployment of 5G infrastructure globally, with its 5G base stations already receiving approval for sale within the EU. The additional R&D spending should help it realize these ambitions.