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Iris Deng

Huawei Technologies poured more than a quarter of its first-half revenue into research and development, prioritising long-term technological independence over short-term earnings as first-half profit plunged 36 per cent.
R&D expenses jumped 25 per cent year on year to 121.4 billion yuan (US$18 billion) for the six months through June, accounting for over 25 per cent of total revenue, according to a filing on Monday with the Shanghai Clearing House, the primary central clearing counterparty in China’s interbank market.
The surging technology spending, as well as rising component costs, pushed net profit for the Shenzhen-based giant down to 23.8 billion yuan from 37.2 billion yuan in the same period last year.
This marks the second consecutive year of declining first-half profits for the company.
Net operating cash flow also took a heavy hit, swinging to negative 39.9 billion yuan from a positive inflow of 31.2 billion yuan in the same period last year.
Still, revenue for the period rose 9.55 per cent to 467.8 billion yuan from 427 billion yuan a year earlier, bolstered by a strong rebound in smartphone shipments and accelerating demand for its artificial intelligence processors.
As a privately held entity, Huawei occasionally releases its operational figures via bond issuance disclosures on the clearing venue.
The heavy spending underscores Huawei’s dual challenge: defending its domestic market leadership against skyrocketing memory chip costs while pouring billions into home-grown chip architectures amid US trade curbs.

Huawei led the Chinese smartphone market with a 22.6 per cent share in the second quarter, driven by a 19.4 per cent jump in shipment volume, according to data from research firm IDC.
Among the top 10 handset vendors in the world’s largest smartphone market, Huawei was the only one to post quarterly growth. Other Chinese brands including Oppo, Vivo, Xiaomi and Honor suffered sharp declines in shipment volumes, IDC data showed.
Huawei gained ground in the market partly by raising prices more cautiously compared to its competitors, but the company warned that soaring component costs would eventually force its hand.
“With memory prices skyrocketing, smartphone prices may be forced to rise across the board, otherwise [manufacturers] would be selling at a loss,” Richard Yu Chengdong, chairman of Huawei’s Consumer Business Group, said at a launch event earlier this month.
Beyond smartphones, Huawei continues to benefit from expanding adoption of its Ascend AI chips as a domestic alternative to China-restricted Nvidia products. A growing list of China’s AI firms, including DeepSeek, Z.ai and iFlyTek, are looking to deploy Huawei chips and accelerators for running and even training their AI models.
Huawei and other domestic chip suppliers were expected to capture nearly 80 per cent of China’s AI server market this year, further squeezing global rivals such as Nvidia, according to TrendForce data in June.
In May, the US-sanctioned company, which has been cut off from foreign supplies of advanced semiconductors, introduced a new scaling law and a chip architecture designed to deliver products equivalent to an advanced 1.4-nanometre processing node by 2031 without the need for high-end lithography tools.
The tech industry is watching closely for the launch of its coming Kirin 2026 processor, built on Huawei’s LogicFolding architecture, as it is set to power the firm’s flagship Mate handsets launching this autumn.


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Revenue in first half rose 9.55 per cent to 467.8 billion yuan, bolstered by a strong rebound in smartphones and demand for AI chips


Revenue in first half rose 9.55 per cent to 467.8 billion yuan, bolstered by a strong rebound in smartphones and demand for AI chips.


Huawei, with an eye on self-reliance, ploughs 25% of revenue into R&D at expense of profits

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Revenue in first half rose 9.55 per cent to 467.8 billion yuan, bolstered by a strong rebound in smartphones and demand for AI chips

Revenue in first half rose 9.55 per cent to 467.8 billion yuan, bolstered by a strong rebound in smartphones and demand for AI chips