How did Huawei evolve from a modest Shenzhen-based manufacturer of telephone switches into the world’s largest telecommunications equipment company and a major player in 5G technology, despite significant international sanctions? This question is at the heart of “House of Huawei,” a detailed book by Eva Dou that unravels the secretive nature of one of China’s most powerful firms.
Founded in 1987 by Ren Zhengfei in the Shenzhen Special Economic Zone, Huawei’s initial focus was on telephone switches to support China’s growing communication needs. Ren’s previous work in China’s military engineering corps shaped his highly disciplined and secretive management style, though the military itself had little direct connection to Huawei’s telecom business. Two turning points defined Huawei’s rise: the early 1990s shift from analog to digital technology, which broadened its domestic enterprise reach, and the 2000s globalization phase, which established Huawei as a worldwide telecom powerhouse.
Huawei operates under a unique organisational structure. Officially a limited liability company, Ren holds about 1% of shares, while employees hold the remainder through a trade union. Yet, despite this formal setup, the real power resides with a small group of top executives and Ren himself. Huawei explicitly does not operate like Western shareholder-driven firms; its mission is to become a “leading world-class enterprise,” mirroring the Chinese Communist Party’s long-term survival focus rather than purely profit-maximisation.
Huawei’s expansion has been intertwined with the Chinese state, which has supported the company’s growth while Huawei has developed technologies like the Safe City facial recognition system used widely for urban surveillance in China and exported abroad. The government’s National Intelligence Law obliges companies to “support, assist and cooperate” with state intelligence, a key justification for the U.S. and allied nations’ sanctions and restrictions against Huawei. Ren has denied any cooperation with Chinese state access to data, though scepticism remains.
From 2018 onwards, Huawei became a focal point in the escalating technology tensions between China and the United States. The detention of Ren’s daughter, CFO Meng Wanzhou, on charges of violating U.S. sanctions against Iran, and the U.S. government’s designation of Huawei as a national security threat marked the start of extensive export controls and bans. These restrictions curtailed Huawei’s access to American technology, pushing the company into ‘survival mode.’
Despite these constraints, Huawei has pivoted successfully by diversifying beyond telecom infrastructure into domains like smart-driving technology, software, and advanced chipmaking. It has recovered its consumer business, significantly increasing smartphone shipments, and has emerged as a major player in the electric vehicle market, partnering with state-owned automakers and marketing cars under its Aito brand. Huawei’s HarmonyOS operating system and homegrown chip technologies—developed to circumvent U.S. sanctions—have enabled it to stay competitive in the AI and 5G arenas.
One striking recent development is Huawei’s launch of the Mate 60 Pro smartphone, powered by the Kirin 9000s chip, which was manufactured domestically by Semiconductor Manufacturing International Corporation (SMIC). This chip uses SMIC’s advanced 7-nanometre technology, marking a significant step in China’s effort to build a self-reliant semiconductor ecosystem. This release defied ongoing U.S. export restrictions introduced in 2019 aimed at blocking Huawei’s advanced chip production capabilities.
The U.S. government continues to tighten controls, warning that Huawei’s AI chips—such as the Ascend 910 series—could violate export laws because they incorporate or are produced with American technology. Despite these limitations, Huawei claims its AI chips outperform competitors like Nvidia in certain respects, and the company is growing its domestic production to meet demand from Chinese firms cut off from U.S. suppliers.
In parallel, legal pressures persist in the United States. A federal judge recently ruled that Huawei must face multiple criminal charges including racketeering, trade secret theft, and bank fraud linked to alleged sanctions violations involving Iran. While charges against Meng Wanzhou were dropped, the broader case remains scheduled for trial in 2026. The Biden administration has discontinued the controversial China Initiative that catalysed these prosecutions but continues to enforce restrictions on Huawei.
Enforcement of U.S. export controls is also exemplified by the recent $4.25 million settlement paid by Alpha and Omega Semiconductor Limited for unauthorized shipments of power controllers to Huawei, highlighting the strict regulatory environment surrounding trade with Huawei.
Huawei’s vast portfolio of over 100,000 patents, particularly in 5G, has also become a strategic asset. The company has licensed its 5G technology to rivals like Oppo to open up new revenue streams after sanctions severely curtailed its smartphone business. Huawei has historically been less aggressive than peers like Nokia or Ericsson in patent monetisation but holds critical standard-essential patents vital for global 5G interoperability.
Globally, Huawei’s 5G technology polarises opinion: countries like Australia, Canada, the UK, New Zealand, Japan, and much of Western Europe have banned its use citing security concerns, while Russia, Southeast Asia, and many developing nations have embraced it. This division reflects broader geopolitical struggles for technological supremacy, with Huawei positioned as both a symbol and instrument of China’s ambitions.
In essence, Huawei’s story is a remarkable narrative of resilience, innovation, and controversy. The company claims to be a competitive global enterprise, but its close ties to the Chinese state and involvement in surveillance technology fuel deep mistrust in Western capitals. As the US-China tech rivalry intensifies, Huawei sits at the centre of a complex international challenge involving trade, national security, technology sovereignty, and global standards for the next generation of digital infrastructure. Understanding Huawei, as Eva Dou illustrates, is key to understanding the evolving landscape of global technology politics.
Source: Noah Wire Services
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