Huawei to invest $4.2b in Italy while cutting back US business

BEIJING • Chinese telecom giant Huawei Technologies plans to invest US$3.1 billion (S$4.2 billion) in Italy over the next three years, making its latest move to leverage European technologies for future growth amid challenges from the United States.

Mr Thomas Miao, Huawei's Italian unit chief executive, said the investment plan would create 1,000 new direct jobs from this year to 2021, reported Italian news agency Ansa. Specifically, the plan would consist of US$1.2 billion invested in operations and marketing, and US$1.9 billion in direct supplies of Huawei's products. Also, US$52 million would be added for research and development activities.

As part of the overall investment plan, Huawei would spend about €2 million (S$3 million) to build a laboratory with the University of Pavia in Italy to develop chips, Russia's Sputnik news agency reported.

Huawei, which started operations in Italy in 2004, employs about 850 people in the country.

The Italian investment came after Huawei said it plans to build and operate an optical device R&D base in Britain in the next five years.

Huawei is facing restrictions from the US government, which added it to an Entity List in May, banning the world's largest telecom equipment maker from purchasing any US technologies without special government approval.

While the US Department of Commerce said earlier this month that it would issue licences to US firms seeking to sell products to Huawei when "there is no threat to national security", analysts said the Chinese company is already determined to move more of its suppliers and R&D centres to Europe.

"Though the restrictions are relaxed to some extent, it was already very clear that the US market is not a level playing field for Huawei. It must make strategic adjustments of its R&D layout," said independent analyst Fu Liang, who has been following the telecom industry for more than a decade.

Meanwhile, more than 600 jobs would be lost at Huawei's R&D subsidiary in the US, Futurewei Technologies, as a result of "curtailment of business operations" caused by Washington's sanctions.

CHINA DAILY/ASIA NEWS NETWORK, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on July 24, 2019, with the headline 'Huawei to invest $4.2b in Italy while cutting back US business'. Subscribe