Just twenty kilometres north of Strasbourg stands a state-of-the-art industrial complex, completed in September. It was supposed to bustle with life as Huawei‘s first European factory, symbolising a €200 million investment and the promise of 500 jobs. Instead, the corridors are silent and the 52,000 square metre facility has become a monument to the changing geopolitics and caution of the Old Continent.
According to sources close to the matter, the Chinese tech giant is holding off on launching production and is considering a complete change of plans, including the sale of property. The decision is a direct result of cooling relations between Europe and China and slower-than-expected deployment of 5G technology. Local officials confirm that the plant has already been visited by other industry groups and that the Grand Est region has cancelled a previously agreed grant of €800,000 due to a lack of clarity about the future of the project.
The situation in France reflects a wider trend in Europe, where governments are increasingly emphasising the need for ‘digital sovereignty’. While Paris continues to declare its openness to Chinese investment, the telecoms sector has been placed under a de facto national security umbrella. An even clearer signal is coming from Berlin. German Chancellor Friedrich Merz has toughened his course towards Beijing, setting up an expert commission to review trade policy. Germany has announced not only the replacement of Huawei components in key 5G network components next year, but also a ban on Chinese technology in the upcoming 6G standard.
Although Huawei still holds an estimated 35% to 40% share of the European market for installed 4G and 5G equipment, the growth momentum in this segment has slowed. Jean-Luc Beylat of Systematic Paris-Region notes that the company’s ambitions have collided with a barrier of security concerns. As a result, instead of fighting for the infrastructure market in an unfavourable regulatory environment, Huawei is starting to prioritise other areas of the business. The company is seeing a strong revenue rebound from smartphone sales and smart driving technology, suggesting a strategic turnaround and allocation of resources where politics is not such a tight barrier.
