Huawei is in better shape to withstand US pressure, thanks to industry’s largest research budget

Huawei Technologies, China’s largest telecommunications equipment and smartphone maker, has tried for many years to break into the US market, to little avail.

With a trade spat escalating between the US and China, and fresh from American phone networks AT&T and Verizon withdrawing their support of the Chinese brand – most handsets sold in the US are subsidised by carriers – that dream appears further out of Huawei’s reach.

Just how important is the US for Huawei, which is already the world’s third-largest smartphone maker by sales? 

“Realistically, Huawei doesn’t need the US, given its strong market in China, and its increasing market share in Asia, Europe and Africa,” said Paul Haswell, a partner at the global law firm Pinsent Masons. 

The world’s largest economy may be important for Huawei for a different reason: hardware components and software.

One in four of Huawei’s 263 suppliers last year were American, making up the second-largest group of vendors to the Chinese company, according to Bloomberg’s data. Mainland Chinese companies were the biggest group of suppliers, making up 41 per cent of Huawei’s supply chain, followed by Taiwan companies in third place at 9 per cent and South Korean firms in fourth place at 6.8 per cent.