Huawei Profit Drops After Big Tech R&D Spending

Post by : Monika

Photo: Reuters

Huawei, the Chinese technology giant, reported that its net profit fell by 32% in the first half of 2025. This means the company made less money compared to the same period last year. It earned 37 billion yuan (about $5.2 billion).

Surprisingly, while profit went down, Huawei’s revenue increased by 4% to 427 billion yuan. This was the company’s highest first-half revenue since 2020.

Why Did Profit Drop?

The main reason was higher research and development (R&D) costs. Huawei spent 96.9 billion yuan on R&D in just six months. A year ago, it spent 88.9 billion yuan.

The company is investing heavily in new technology because of U.S. sanctions that make it hard for Huawei to buy advanced computer chips and other tech. By spending more on R&D, Huawei hopes to create its own chips and equipment so it won’t depend on outside suppliers.

How Is Huawei Adapting?

Huawei has faced challenges in recent years due to U.S. trade restrictions. These restrictions prevent it from using some of the world’s most advanced chips. To survive, Huawei is focusing on building its own chip technology and designing equipment that reduces reliance on imports.

This approach may hurt short-term profit, but it could secure the company’s long-term independence in technology.

Huawei’s Smartphone Business

• Huawei did not release detailed profit data by product line, but it did share progress in its smartphone division.
• The company made a comeback in the premium 5G phone market in 2023 with its Mate 60 series.
• These phones were mostly sold in China.
• In the first half of 2025, Huawei shipped 26.6 million smartphones worldwide.
• That’s a 1.7% increase compared to last year.
• About 95% of these phones were sold in China, showing the brand’s strong hold on its home market.

Why This Matters

• Innovation Takes Time – Spending on R&D does not bring quick profits, but it builds future strength.
• Record Revenue Shows Resilience – Even with lower profits, Huawei achieved its highest revenue in years.
• Tech Independence is Key – By creating its own chips, Huawei reduces the risk of being cut off by outside suppliers.

Huawei earned less profit in the first half of 2025, mainly because it spent a lot more money on research and new technology. Despite the profit drop, the company’s revenue was the highest since 2020, showing that it is still strong. Huawei’s new 5G phones are selling well in China, and the company is working hard to become independent from foreign technology restrictions.

China tech giant