Huawei's annual R&D investment will reach US$20 billion, with a greater emphasis on basic research

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Yesterday, Huawei officially released a message that they specially awarded a special award to Professor Erdal Arikan, the father of Polar, for his contribution to the 5G field, paying tribute to his contribution to the development of human communications. One of the important reasons is that Polar coding provides important guidance for the development of Huawei's 5G industry.

As early as 2010, Huawei identified the potential of polar codes as an excellent channel coding technology. Based on the research of Professor Erdal Arikan, Huawei invested in further research. After several years of hard work, it has made a number of breakthroughs in the core original technology of polar codes and promoted its transformation from academic research to industrial application. In 2016, the Polar code promoted by Huawei was adopted as the control channel coding for 5G eMBB scenarios, which even caused a sensation in China at the time.

On the one hand, this reflects Huawei's respect for Professor Erdal Arikan. On the other hand, this news from Huawei indirectly reveals Huawei's emphasis on research and development, especially basic research and development:

Huawei said that in the past decade, they have invested nearly 400 billion yuan in research and development. Looking to the future, Huawei will increase its investment in basic research, and 20-30% of its annual research and development expenses of 15-20 billion US dollars will be used for basic research. This is an excellent example for the domestic technology industry.

At the National Science and Technology Innovation Conference two years ago, Huawei founder Ren Zhengfei said, "Huawei's current level is still at the innovation level of engineering sciences such as engineering mathematics and physical algorithms, and it has not yet truly entered into basic theoretical research. As we gradually approach the limits of Shannon's theorem and Moore's Law, and the theory of large traffic and low latency has not yet been created, Huawei has felt that its future is bleak and it can't find its direction." He went on to point out that Huawei is gradually entering the industry's no-man's land, and that the previous "opportunistic" high speed of following others will gradually slow down, and the responsibility of creating guiding theories has arrived.

Huawei's investment in R&D has always been a benchmark in China.

Currently, Huawei has about 80,000 R&D personnel, accounting for 45% of the company's total number of employees. It has 14 research institutes and 36 innovation centers around the world. By the end of 2017, Huawei had obtained 74,307 patent authorizations, applied for 64,091 Chinese patents, and applied for 48,758 foreign patents, of which more than 90% were invention patents. This R&D investment enables Huawei to maintain a very high growth rate while earning hundreds of billions of RMB in revenue each year.

But on the contrary, many other domestic technology companies do not pay enough attention to R&D, which to some extent has affected the development of related domestic industries.

An earlier article in 21st Century Business Herald stated that according to Wind statistics, there are 70 listed companies in the two major concept stocks of integrated circuits and chips, and their R&D expenses in 2017 totaled 28.747 billion yuan, an increase of 18.8% compared with 24.197 billion yuan in 2016, showing a trend of further increasing R&D efforts. However, from an average level, the R&D investment of these 70 chip industry listed companies accounted for 9.17% of their revenue. Compared with international giants, these investments still have a lot of room for growth.

According to ICinsights statistics, among the global semiconductor R&D companies, Fabless R&D investment is generally around 20%, which is worth learning for domestic chip companies.

Some people may say that as a manufacturer that makes both chips and systems, it is normal for Huawei to invest so much in R&D. Let's take Samsung as an analogy. This company makes more and more diverse products than Huawei, and designs almost every aspect of the industrial chain. But their R&D investment in 2017 was only 12.7 billion euros, while Huawei's R&D investment was 10.7 billion euros, ranking sixth in the world.

Past R&D investment has also brought Huawei brilliant results.

In terms of network equipment, Huawei has defeated Ericsson and become the global leader; in terms of integrated circuits, Huawei's chip business led by HiSilicon has always been the leader in domestic chip design, and its products have good competitiveness in various fields. Especially the Kirin chip, it gave Chinese chips the opportunity to compete with international giants for the first time. But we should also realize that whether it is Huawei or other domestic technology companies, there is still a gap with international leading manufacturers, which requires continued investment from companies such as Huawei, especially investment in basic science.

As Ren Zhengfei said, "The development of human society is all on the road of basic scientific progress. And the development of basic science requires endurance of loneliness. Some people don't just sit on the bench for ten years. Some people are lonely all their lives."

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