Huawei Technologies reported a sharp decline in first-half net profit, falling 37% to 23.43 billion yuan ($3.48 billion), despite a 9.6% increase in revenue to 467.82 billion yuan. The drop was driven by soaring research and development expenses, which jumped 25% year-over-year to 121.38 billion yuan, as well as rising raw-material costs. The Chinese tech giant, central to Beijing’s self-sufficiency agenda, has been investing heavily in AI, autonomous driving, and smart devices, aiming to reduce reliance on U.S. suppliers. Since facing U.S. sanctions starting in 2019, Huawei has been rebuilding its global presence. It is also working to offer alternatives to chips from U.S. AI leader Nvidia. While revenue grew across all business segments, the company acknowledged ongoing challenges, including external uncertainty and inflationary pressures. "We are taking active measures, and the full-year outlook is still under review," Huawei said. The firm remains focused on innovation and domestic technological independence amid strained U.S.-China relations.

Huawei's push into AI and next-generation technologies reflects broader efforts by Chinese companies to achieve self-reliance. Despite the profit slump, the company's revenue growth signals resilience. However, high R&D spending and supply chain costs continue to weigh on margins. Looking ahead, Huawei faces a complex landscape shaped by geopolitical tensions and evolving market demands.

Write to Jiahui Huang at [email protected]