Habo Investments, set up by Huawei in April 2019, has closed 17 deals for stakes in Chinese tech companies since August last year, public records show.
The investment arm was established in response to what Huawei’s rotating chairman, Guo Ping, last week described as “suppression” by the United States after escalating restrictions that have cut off Huawei’s supplies of many overseas chips and effectively barred it from building its own.
“Since Huawei is only one company, we use investment and technology to help our supply chain partners become mature,” he said.
Most of Habo Investment’s deals have been in chip-related Chinese start-ups, a few of which have become part of Huawei’s supply chain, Reuters reported.
Vertilite, which was founded in 2015 and received an investment from Huawei this year, makes VCSEL sensors that support facial-recognition technology in cameras.
“Most of these companies are small, niche players who are good at what they do, but they are not necessarily globally competitive,” said Ivan Platonov, who tracks China’s chip sector at research company EqualOcean.
Shoulder Electronics makes RF filters that enable wireless communications but has yet to achieve compatibility for advanced 5G phones.
3Peak, which received investment from Habo this year, makes analogue-to-digital converters (ADC) used in wireless network base stations.
U.S. players dominate that market segment and 3Peak generated only 300 million yuan ($43.99 million) in revenue last year, according to a prospectus it issued before listing on Shanghai’s STAR market.
Habo’s portfolio also includes companies outside Huawei’s core telecoms operations. Several investments in chips, raw materials and battery technology companies point to ambitions in self-driving cars.
Late last month it closed an investment in Open Source China, a Shenzhen-based business behind Gitee, a Chinese rival to U.S. coding platform GitHub.
Habo typically acquires stakes of 5-10 percent, filings show, though valuations have not been disclosed.
The recent investments mark a change in pace and tactics for Huawei, ramping up the frequency of such deals and refocusing on domestic businesses rather than overseas companies.
In 2013, Huawei acquired Ghent-based photonics company Calopia. The following year it purchased Neul, a British maker of chips for the internet-of-things sector.
