In the face of tremendous pressure from the United States, Huawei is increasing its investment in the domestic technology industry, including increasing its holdings in semiconductors and other technology companies to support its supply chain.

Public records show that Hubble Technology Investment Co., Ltd., established by Huawei in April 2019, has completed 17 transactions to buy shares in Chinese technology companies since August last year. This investment department was established in response to the restrictions imposed by the US team Huawei, including cutting off many overseas chip supplies, which actually prevented Huawei from manufacturing its own chips. Guo Ping said: “Because Huawei is just one company, we use investment and technology to help our supply chain partners mature.”

Huawei’s investment efforts also coincide with the government’s increasing efforts to boost China’s semiconductor industry. Although these investments may help Huawei in the future, analysts said that so far, they have played little role in addressing supply chain gaps.

A Chinese chip investor said: “This will take a long time to work, but Huawei does not have many good options, so it must turn to foreign investment.” Huawei declined to comment on the operation of the investment department.

Most of Hubble’s investment targets are chip-related Chinese start-ups, some of which have become part of Huawei’s supply chain. However, many companies supported by Huawei are in the early stages of development. Ivan Platonov, an analyst at research firm EqualOcean tracking the Chinese chip industry, said: “Most of these companies are small niche companies that are good at their own businesses, but not necessarily globally competitive.”

The recent investment signifies that Huawei has changed its strategy, increased the frequency of such transactions, and refocused on domestic business instead of overseas companies. For example, in 2013, Huawei acquired Calopia, an optoelectronics subsidiary headquartered in Ghent, Belgium.  The following year, it acquired Neul, a British IoT chip maker.

A former Huawei employee searching for acquisition targets said: “Huawei likes to do research and development on its own, so investment or acquisition is only carried out as a last resort, and it has also tended to invest in American or European technology companies in the past.”