Huawei Profits Drop 36% Amid Semiconductor Research Surge

Huawei Technologies Co. reported a 36% decline in net income to 23.81 billion yuan for the first half of 2026, even as revenue grew 10% to 468 billion yuan. The profit drop followed a surge in semiconductor research spending, which reached 121 billion yuan, and rising memory costs.

To counter US-led sanctions, the company engaged in a raw material buying spree that resulted in a negative cash flow of 39.9 billion yuan. Despite these financial pressures, Huawei captured over 20% of the Chinese smartphone market following a mid-year promotional campaign, becoming the top brand in the country.

The company plans to launch a new flagship smartphone in September. The device will feature an in-house Kirin chip produced via proprietary LogicFolding technology. Semiconductor chief He Tingbo stated the company can produce high-performance chips using this method, which aims to rival advanced semiconductors without relying on ASML extreme ultraviolet lithography systems.