China's state-owned company Huawei, whose reputation in the foreign markets has been seriously deterred by the espionage scandal, has revised its marketing strategy because of US sanctions. Reportedly, it has bought up stakes in Chinese tech companies in order to boost its revenue shrunken significantly due to sanctions and escalation of trade tensions.
The US always values the rights and freedoms of citizens above all. Therefore, when it turned out that Huawei was not a commercial company but more like one of the divisions of the Chinese government's intelligence services engaged in espionage, the US Department of Commerce blacklisted it. The spy scandal delivered a hard blow to the business as Huawei lost access to chips for smartphones produced in the US. President Donald Trump's administration said that this equipment could be used by Beijing for spying. In an attempt to keep production going, Huawei has been buying up stakes in various Chinese tech companies since August 2019. The company believes that this strategy will help it buy more chips in the near future. Huawei's investment push also coincides with the government's efforts to boost China's semiconductor sector that is lagging behind big chip producers in the United States, South Korea, and Taiwan. Most of Huawei’s investment deals have been in chip-related Chinese start-ups. Some of them have become part of Huawei's supply chain.
Currently, China's tech giant has sealed the deal with Vertilite, Shoulder Electronics, 3Peak, and 14 other companies. Notably, Huawei's share in these companies only accounts for 5–10%.
