Huawei’s R&D investment soars to $22.4bn in 2021

During an exclusive roundtable to discuss Huawei’s 2021 annual results from a Middle East business perspective, Karl Song, VP of Global Communications, Huawei, said that the company increased its R&D investment to $22.4bn, representing 22.4 per cent of its total revenue.

“Both our R&D expenses and R&D expense ratio reached a 10–year high in 2021, and Huawei ranked second in the 2021 EU industrial R&D investment scoreboard. Our total R&D investment over the past decade is more than $132.5bn,” said Song.

“Our total revenue in 2021 reached $99.9bn, and we generated a net profit of $17.8bn with a net margin of 17.9 per cent. Huawei recorded an increase of 75.9 per cent year-on-year in terms of net profit, and overall, we wrapped up the year in a solid financial position,” he added.

Song further reiterated the company’s intention to continue investing heavily in R&D to strengthen its innovation in systems engineering and drive fundamental changes in three areas: fundamental theories, architecture, and software.

The company reported steady performance in its ICT infrastructure business while new business segments like digital power, and cloud proliferated and its ecosystem development efforts have entered the fast lane. “In the Middle East, Huawei continued to play a pivotal role in the development of the region’s ICT industry, enabling digital and intelligent transformation accelerated across industries. Innovations in 5G, cloud, AI and other fields are pushing the digital economy into a new phase of development,” said Song.

“The Middle East is ahead of many other regions when it comes to adoption of advanced technologies. Because of the fast rollout of 5G, for example, some countries in the region serve as a real proof point of how technology can help to advance the development of all industries, especially when integrated with technologies such as cloud and AI,” he added.

Song also highlighted the trend for green development, which has become a globally recognised mission, specifically vital to the Middle East’s sustainable future in-line with the carbon neutrality targets many countries in the Middle East have already set. As a leader in the global ICT industry, Huawei has been developing innovative green technologies that make ICT products more energy efficient. Using its simplified site solution, renewable energy, and intelligent technologies, Huawei helped carriers deploy green sites in more than 100 countries.

The Huawei executive noted that in UAE, the company partnered with Moro Hub, a subsidiary of DEWA, to roll out the largest 100 per cent green power DC in the region. In addition, in Saudi Arabia, Huawei is constructing one of its largest projects in the Red Sea to roll out an energy storage infrastructure with a capacity of 1,300 gigawatt-hours.

“Even in a post-pandemic environment, we see clear opportunities to support Middle East organisations in their digital transformation and reimagine the future. It involves bringing technological advances to even more industries and creating new value by helping governments and enterprises go digital while operating more intelligently. The task ahead is about ensuring all people benefit from technological progress,” Song concluded.

When asked by Gulf Business what the key barriers are to achieving carbon neutrality and what actions can enterprises take to run the business with more stability, Song said: “To achieve a green, low carbon, energy-efficient society with lowering carbon emissions is actually one of the consensus we now have worldwide. This is the direction for the future growth of economies and societies.”

“The Middle East region is actually abundant in terms of solar energy because it receives 25,000 hours of sunlight all year round, the highest in the world. This gives the region a unique position to develop solar power electricity. As an ICT products and solutions provider, Huawei has the expertise in providing energy-efficient and low carbon emission ICT equipment, site, and data centre infrastructure, including the fixed network the mobile network like 5G. So we can use that to help telecom operators transform or build green sites and make plans for green networks. And this is the carbon footprint concept that we usually talk about the carbon impacts of the ICT industry itself. But more importantly, the ICT industry is an enabler to other industries to help them reduce carbon emissions.”

He also added: “Huawei has been ranked number one in terms of market share for many years in the areas of smart PV and energy storage, especially with our very strong string inverter products. For example, in Dubai, we work with Moro Hub, a subsidiary of DEWA, to roll out the largest in the region, 100% green power DC. And in Saudi Arabia, we have the largest project being constructed by Huawei in the Red Sea for the rollout of the energy storage infrastructure with the capacity of 1,300 gigawatt-hours. In China’s Qinghai province, we have built the largest solar-powered campus in the world, with an area larger than 80 football courts combined. This campus has a PV in storage capacity of 2.2 gigawatts, generating 5 billion kilowatt-hours of clean electricity a year.”

“Last year, Huawei set up the railway digital power subsidiary, which focuses on five business areas, smart PV, DC facility and power for vehicles, site energy, and comprehensive energy services. In this area, we combine digital technologies with power electronics to use bits to manage watts. I believe that moving forward, we will see a lot of cooperation coming out of the Middle East in these five areas,” he said.