The COVID-19 crisis is mostly over for Huawei, its Chief Executive Officer had claimed. CEO and founder Ren Zhengfei recently went on record to reveal the situation at the company's home country is finally stabilizing.
In an interview with The Wall Street Journal, Ren also revealed Huawei's intent to double down on key investments for the remainder of 2020. The most notable boost will target its research and development division whose annual budget will surpass $20 billion for the first time ever. The figure represents an increase of nearly $6 billion year-on-year.
The R&D budget increase is both a sustainability strategy and a showing of strength. Huawei remains in dire need of such publicity following a troubled period of clashes with the United States government that's still far from over.
Is Huawei acting prematurely or truly stabilizing?
Huawei's CFO and Ren's daughter, Meng Wanzhou, remains under house arrest in Canada. She's been fighting a stateside extradition request since late 2018. The coronavirus outbreak slowed down those proceedings in recent weeks. Regardless, she's still facing a realistic risk of being extradited to the U.S. in the second half of the year.
Among other things, Meng is facing charges of conspiracy, fraud and violations of American trade sanctions on Iran. Both the CFO and her father repeatedly called the litigation an unfair hoax with purely political motivations.
Given that state of affairs, it's dubious to what extent is Huawei currently truly stabilizing. Even Ren himself admitted the company has yet to see the worst effects of the COVID-19 crisis. Naturally, that was in reference to the tech giant's upcoming financials.
What's more, some industry watchers remain troubled by the fact most of the company's staffers are now returning to work; while the situation in Wuhan, the origin point of the virus, is stabilizing, that's not the case globally. It's worth reminding there's still no vaccine for the newest coronavirus strain either. In other words, a second outbreak wave in China isn't off the table.
Yet Huawei can hardly afford to wait after enduring heavy blows from the West in recent times. Especially given how many of its production lines were closed since the turn of the year in order to combat the spread of the virus.
Thousands of its employees are now working overtime in order to mitigate the effect of COVID-19. In a recent interview with Chinese media, Ren estimated some 20,000 staffers are presently doing everything they can to help resume normal R&D operations at Huawei.