Huawei ‘s latest financial results show that the company is consciously sacrificing current profitability for a long-term goal: total technological independence and dominating its home market.
Although net profit fell by 32% in the first half of the year, revenues are growing and the giant investment in research and development is beginning to show tangible results.
Huawei reported a 32% drop in net profit in the first half of 2025 to 37 billion yuan (US$5.17 billion). At first glance, this is bad news, but a fuller picture emerges after analysing revenue, which rose 4% to 427 billion yuan, reaching its highest level since 2020.
The key to understanding this discrepancy lies in research and development (R&D) spending, which reached a record 96.9 billion yuan during the period.
This is a deliberate strategy, not a sign of weakness. Cut off from advanced US technology from 2020 onwards, the company is devoting huge resources to building its own self-sustaining ecosystem – from chip design to manufacturing equipment.
It is a costly war of attrition in which short-term profits come down to the strategic necessity of independence from foreign suppliers.
The most visible fruit of this strategy is Huawei’s return to the top of the Chinese smartphone market. After years of problems with access to 5G components, the company successfully launched the Mate 60 series to regain its leadership position.
According to IDC data, global shipments of Huawei smartphones increased by 1.7 per cent to 26.6 million units in the first half of the year, with as many as 95 per cent going to the Chinese market.
This shows how effectively the company has turned US sanctions into a driver for consolidation in its powerful home market.
By focusing on China, Huawei has not only compensated for its losses in international markets, but has also built a loyal customer base for whom consumer patriotism has become an additional purchasing argument.
Although the company did not disclose detailed results for individual divisions, it is clear that it is the consumer segment, supported by growing automotive and cloud market shares, that is driving revenue growth.
The decline in profits is therefore not a symptom of a crisis, but a calculated cost in the battle for technological sovereignty. Investors and competitors should look not at the current margin, but at Huawei’s growing strength in key strategic areas.
