Technological Blockades: Huawei's Strategy Adjustment Response

Hao Ni

Wenzhou-Kean University, Wenzhou, Zhejiang, China

Keywords: Strategic Adjustment, Technological Blockades, Huawei.

Abstract: Against the constantly tense global technological situation, enterprises restricted by technological blockades

must adjust their strategies promptly to maintain competitiveness during the crisis. This article takes Huawei

as a case to explore how enterprises should adapt their strategy when facing technological blockades. The

article adopts the SWOT module to analyze Huawei's internal strengths and weaknesses and the external

opportunities and threats. Analysis shows that Huawei, relying on its strong technological strength and the

policy support of the Chinese government, has actively introduced talents under the background. Against the

backdrop of technological blockade, it has not only adjusted its global strategic layout but also maintained the

stability of its market share. The research results contribute to a broader understanding of how enterprises

respond to external technological constraints through strategic adjustments.

1 INTRODUCTION

Technology blockades in today's globalized business

environment have become a significant aspect of

international competition, particularly in science and

technology. In recent years, with the complex

changes in global politics and economics, some

countries have implemented technological blockades

against specific countries and enterprises for strategic

reasons. Under the background, China and its

enterprises have also suffered from technological

restrictions. The global financial crisis of 2008

severely impacted the United States and Europe

economies. However, China's multi-year planning

policies, market liberalization, state-owned enterprise

reforms, and other measures contributed to China's

economic rise, leading to the rapid development of

China's economy and technology in 2008 (Heilmann

& Melton, 2013). According to official statistics,

China's Gross Domestic Product (GDP) grew by

6.1% in the first quarter of 2009 and 7.9% in the

second quarter. This reflects the development of

China's economy during 2009. In the years that

followed, Chinese technology continued to advance

rapidly. In 2016, the Chinese government conducted

5G trials, which promoted the commercialization of

5G technology (Chen & Kang, 2018). Based on the

above background, some countries, led by the United

States, began to implement measures to restrict the

technological development of Chinese enterprises. In

2017, the Trump administration released its National

Security Strategy report, which proposed trade

sanctions against Chinese companies. In 2019, the US

Congress passed an act that created a "whole-of-

government China strategy," requiring all

government agencies to develop measures against

China.

Technological blockades manifest economic

struggles between countries and the deep division of

labor within the global supply chain system. In

today's world, where business relies on global supply

chains, many enterprises depend significantly on

technologies, raw materials, production capacities,

and other aspects from various countries and regions

(Sanders et al., 2019). Consequently, any technology

blockades and trade restrictions may pose substantial

risks to business operations. In the short term, such

restrictions have led to a decline in the short-term

market share of Chinese enterprises. The fact that

China still relies on imports for high-end equipment

and other critical components shows the significant

impact these blockades have on the development of

Chinese enterprises. This dependency led to a decline

in growth in Chinese enterprises and also highlights

the urgency for strategic adjustments to enhance

resilience and reduce the influence of external

pressures.

Facing the challenges brought by technology

blockades, enterprises need to implement strategic

adjustments quickly. First, enterprises need to

Ni, H.

Technological Blockades: Huawei’s Strategy Adjustment Response.

DOI: 10.5220/0014294500004859

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st International Conference on Politics, Law, and Social Science (ICPLSS 2025), pages 111-117

ISBN: 978-989-758-785-6

111

increase their research and development investments,

striving to break through the technical bottlenecks to

reduce their dependence on foreign technologies and

the impact of technology blockade. Concurrently,

enterprises must strive to build localized supply

chains, decrease their reliance on global supply

chains, and strengthen regional cooperation.

Moreover, enterprises should actively explore

emerging markets, expand their business reach, and

reduce the risks associated with over-reliance on a

single market. This study analyzes the case of

Huawei, a Chinese multinational technology

company, to explore how the enterprise navigates the

technological blockades and challenges posed by

external pressures and its strategic adjustments in

response. The analysis will consider various criteria

that help to understand why Huawei was chosen as a

representative case and the broader implications of its

response for other global firms facing similar

circumstances.

2 CASE DESCRIPTION

Established in 1987, Huawei has evolved from a

small communications equipment supplier to a

leading global technology company. It has achieved

remarkable success in telecommunications

infrastructure and consumer electronics. Huawei

operates in more than 170 countries, employs more

than 200,000 people, and serves over 3 billion people

worldwide. Huawei is a global leader in 5G network

construction and has an important impact on artificial

intelligence, cloud computing, and other aspects. In

2020, Huawei overtook Ericsson to become the

world's leading supplier of 5G base stations.

However, Huawei's rapid growth and technological

achievements have also led to complex conflicts. For

example, they have triggered disputes between China

and the United States. Since 2018, the US

government has made a series of allegations against

Huawei, including issues related to national security,

espionage, and other acts. In 2019, the Trump

administration added Huawei to the "entity list,"

which restricts US companies from providing Huawei

with key technologies and related parts. This includes

critical components such as chips, semiconductors,

and other technologies that have significantly

impacted Huawei's products and supply chain. The

technology blockade challenges Huawei faces extend

beyond US trade restrictions and involve complex

global supply chain dynamics. As an enterprise

extensively integrated into global technology and

supply chains, Huawei has had to make rapid strategic

adjustments to maintain its competitiveness in the

face of these restrictions. These adjustments are

responses to the immediate impact of the technology

blockades and reflections of the broader geopolitical

and economic tensions that characterize the current

global landscape.

Several key factors have led to Huawei being

selected as the subject of this case study. First of all,

as a global leader in the field of 5G, Huawei is highly

representative in network infrastructure construction

and research and development of high-tech products

(Zhang, 2024). Given its significant impact from the

technology blockades, the strategic adjustment made

by Huawei holds substantial reference value for other

enterprises facing similar challenges. Secondly, the

technology blockades that Huawei faces reflect a

trade war and involve complex elements such as

countries and global supply chains. In this intricate

political context, Huawei's strategic adjustments offer

valuable insights for other companies facing similar

challenges.

Huawei operates in one of the most sensitive

sectors of the global technology industry, particularly

telecommunications and semiconductors. The

telecommunications industry is a vital pillar of the

global economy and a key part of national security

strategies (Faccio & Zingales, 2021). With the

increasing global competition in 5G technology,

Huawei has leveraged its leading position in 5G to

expand its global development. However,

technological developments have made Huawei a

target of repression by the United States and its allies.

Since 2018, the United States has stepped up its

crackdown on a series of Chinese high-tech

companies led by Huawei. The United States has

restricted Huawei's business in the global market

because Huawei and other companies endanger US

national security, including prohibiting US

companies from selling key technology products such

as semiconductor chips to Huawei. Such restrictions

have made it challenging for Huawei to purchase

chips and other critical components. In addition to US

sanctions, some other countries have imposed

restrictions on Huawei for political reasons. In 2020,

over 30 countries banned Huawei from participating

in the construction of 5G networks in their countries.

This action has significantly limited Huawei's

opportunity in international markets. Therefore,

Huawei's strategic adjustment in the face of

technology blockades effectively reflects the

measures that high-tech enterprises can take in

response to such challenges and is representative.

Huawei's global business depends highly on

international markets and supply chains. According to

ICPLSS 2025 - International Conference on Politics, Law, and Social Science

112

Huawei's 2020 annual report, Huawei's foreign trade

ratio exceeds 60%, meaning more than half of the

company's revenue comes from the global market.

Huawei has traditionally relied heavily on trade with

foreign suppliers for key technology products such as

semiconductors and displays. However, the

technology blockades have prevented Huawei from

continuing to purchase key technologies and

components from foreign companies such as

Qualcomm and Google. This has had a substantial

impact on Huawei's production capacity. The US

sanctions have forced Huawei to seek alternative

suppliers from other countries. For instance, Huawei

attempted to purchase semiconductors from Chinese

companies such as SMIC (Tse et al., 2024). However,

due to technological gaps, this supplier shift has not

effectively resolved Huawei's chip shortage.

Therefore, the strategic adjustments made by Huawei

in response to the technology blockades effectively

reflect the measures enterprises relying on global

supply chains can take to navigate this challenge.

3 SWOT MODULE

The SWOT model is a strategic analysis framework

that examines internal strengths, weaknesses, and

external opportunities and threats to explore how to

utilize strengths better and overcome threats to create

new opportunities (Benzaghta et al., 2021). Strengths

refer to internal positive factors, while weaknesses

refer to internal defects. Opportunities refer to

positive factors available in the external environment,

and threats refer to challenges in the external

environment that may bring risks. By conducting a

SWOT analysis, enterprises can formulate more

targeted strategies to capitalize on strengths,

compensate for weaknesses, seize opportunities, and

avoid threats, thus enhancing their overall

competitiveness. After the completion of the SWOT

analysis, the enterprise can develop specific strategies

such as Strengths-Opportunities (SO), Weaknesses-

Opportunities (WO), Strengths-Threats (ST), and

Weaknesses-Threats (WT) strategies based on the

conclusion. This essay employs SWOT analysis and

its strategic method to explore Huawei's strategic

adjustment in response to technology blockades.

3.1 Strengths

First of all, in the realm of technology, Huawei has

many significant advantages in technology,

particularly in the field of 5G. Since 2009, Huawei

has been deeply invested in 5G technology research.

Since then, Huawei has become a pioneer with the

launch of the world's first commercially available 5G

base station chip, "Tiangang." This technological

breakthrough enhances the performance of

communication devices and solidifies Huawei's

leadership in the industry. According to the World

Intellectual Property Organization (WIPO) and other

research institutions, Huawei is one of the world's

largest 5G standard-essential patents (SEPs),

consistently ranking first globally in the number of

5G core patent applications. Huawei's advantage in

5G technology puts it ahead of many companies. Up

to 2018, Huawei was the only company that could

produce all the elements of 5G on a large scale and at

a low cost. Secondly, Huawei enjoys a vast consumer

base. On the one hand, Huawei offers a broad and

diverse product portfolio. Huawei has products in

different price segments, so consumers have a wide

choice of products that cater to them best. From high-

end flagship phones (mate, p series) to sub-brands

(Honor), Huawei provides a wide range of choices

that meet the diverse preferences of consumers. On

the other hand, Huawei has a prominent national

brand image. Huawei is seen as a proxy for China in

the context of growing trade frictions between the

United States and China and the ongoing technology

blockades (Christie, Jakobsen & Jakobsen, 2023).

The concept of "supporting domestic production" is

deeply embedded in the minds of Chinese consumers,

providing Huawei with a loyal and substantial

consumer base. Thirdly, Huawei has a very high

investment in research and development (R&D).

Huawei has consistently been one of the world's

largest R&D spenders. In 2022, Huawei allocated

25.1% of its total revenue to R&D. This continuous

significant investment in research and development

provides conditions for Huawei to break through

technical bottlenecks. Huawei's R&D investments

span multiple critical areas, including 5G, artificial

intelligence, and semiconductors. These investments

have strengthened Huawei's competitiveness and

allowed it to adjust to the dynamic international

context.

3.2 Weaknesses

Although Huawei has robust technical strengths, it

faces significant challenges due to its reliance on

international suppliers for key components,

particularly high-end semiconductors. Following the

imposition of technology blockades and the gradual

geopolitical tension, many companies in the United

States and its allied nations have severed supply

cooperation with Huawei. The most direct impact is

Technological Blockades: Huawei’s Strategy Adjustment Response

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the interruption of the high-end chip supply chain.

Huawei's self-developed Kirin chips, which rely

heavily on TSMC for advanced process (7nm and

below) manufacturing, were forced to halt production

due to US export controls. Such behavior has

seriously affected Huawei's high-end smartphone

business, highlighting Huawei's vulnerability due to

its high dependence on overseas key technologies.

Moreover, countries led by the United States banned

Huawei from participating in constructing 5G

networks within their countries, citing "national

security" concerns. This has led to a contraction of

Huawei's international market. In addition, the

absence of Google's Mobile Services (GMS) has

significantly reduced the market appeal of Huawei's

mobile phone industry, especially in regions outside

China. As a result, Huawei has to readjust its strategy,

focusing more on developing the domestic market

and some international markets that remain open. The

technology blockades have not only put pressure on

Huawei's supply chain and market but also affected

Huawei's internal organizational stability. In the face

of external uncertainties, core technical talents can be

lost. The loss of key personnel, especially in high-

tech fields such as semiconductor design, could have

a lasting impact on Huawei's long-term innovation

capabilities and overall competitiveness.

3.3 Opportunities

Despite facing technology blockades, Huawei has

been presented with new opportunities for developing

5G, artificial intelligence, cloud computing, and other

technologies. These advancements offer Huawei

avenues to innovate and expand its technological

advantages. In response to the technology blockades

imposed by the United States, the Chinese

government has implemented a series of supportive

policies to bolster domestic enterprises and foster the

technological development of Chinese enterprises.

Since 2014, the Chinese government has set up the

National Integrated Circuit Industry Investment

Fund. This fund is designed to promote the

development of industrial chains such as

semiconductors through strategic capital guidance

(Liu, 2023). The state fund has alleviated Huawei's

R&D pressures by lowering the financing barriers for

relevant enterprises and helped establish a "top-

down" integrated innovation system. This system

facilitates coordinated development across the

industry, enhancing Huawei's capabilities in critical

areas. Moreover, the Chinese government has

launched various subsidies and incentives for local

technology companies, including Huawei, to expand

its domestic market under the "double cycle" strategy.

This strategy emphasizes domestic and international

markets and reduces companies' dependence on

international technologies. Faced with a series of

policy supports, Huawei has effectively explored

ways to develop its technology further.

3.4 Threats

A major external threat to Huawei is the ongoing

technology blockades imposed by the United States

and other Western countries. In 2019, the US

government placed Huawei on the Entity List,

restricting its access to key technologies, especially

US-made semiconductors and software. This forced

Huawei to seek alternative solutions, such as

developing its HarmonyOS operating system and

HiSilicon chipset. However, difficulties procuring

key components due to the technology blockades

could erode Huawei's competitive advantage,

particularly in its consumer electronics sector.

Secondly, as the confrontation between China and the

United States is becoming increasingly acute, Huawei

is increasingly seen as a representative of China's

technological rise and is given political significance.

As early as 2003, Huawei was accused of engaging in

espionage activities.

Meanwhile, it has also been accused of

continuously violating international economic

sanctions against Iran and North Korea. This makes

Huawei's business activities easier to obstruct and

increases its "non-market risks," such as difficulties

accessing markets in other countries. The technology

blockades have also triggered a restructuring of

global supply chains. With rising costs in chips, raw

materials, manufacturing, and other links, Huawei has

to find alternative suppliers to replace the US

suppliers. This leads to higher procurement costs and

longer lead times. Some countries, driven by

geopolitical interests, have blocked Huawei

equipment entry. For example, in fierce international

competition, Huawei is also under significant

pressure in the domestic market. Competitors like

Oppo, Vivo, and Xiaomi have rapidly expanded their

market share and seized the space in Huawei's

domestic middle and high-end market. In 2021,

OPPO and Vivo occupied the top two positions in the

Chinese smartphone market with market shares of

22% and 21%, respectively, while Huawei was the

only one among the top five brands to experience a

decline in sales, with its market share dropping to

16%.

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4 SOLUTIONS

Huawei's SWOT analysis shows that while the

company has significant technological advantages

and a large consumer base, it also faces substantial

pressure and challenges when seizing development

opportunities. As Western countries impose

technological blockades on Huawei, Huawei is

confronted with unprecedented challenges. In the face

of external political pressure and technological

restrictions, Huawei has actively responded to these

difficulties through strategic adjustments. These

strategic adjustments can be effectively analyzed

through the SWOT analysis framework, which

includes four key dimensions: SO, WO, ST, and WT.

The following section will provide a detailed analysis

of how Huawei responds to challenges and seizes

opportunities through strategic adjustments in the

context of technological blockades.

4.1 SO Strategy

Huawei's remarkable technological achievements in

5G and telecommunications have been a cornerstone

of its success for many years. The technology

blockades led by the United States has elevated the

significance of this advantage, compelling Huawei to

enhance its independent innovation capabilities

further.

Huawei has been intensifying its independent

research and development (R&D) and technological

innovation efforts. Huawei's leading position in 5G

and communication equipment have become its core

competitive strengths. Huawei's long-standing

commitment to high R&D investment has laid a solid

foundation for its technological innovation. With

technological blockades, Huawei has no choice but to

reduce its dependence on foreign technologies and

rely more on its innovation capabilities. As of 2024,

Huawei has invested more than 1,249 billion yuan in

research and development expenses over the past

decade.

Meanwhile, the global demand for technologies

such as 5G and artificial intelligence presents new

opportunities for Huawei. Against this backdrop,

Huawei has intensified its efforts in independent

research and development and technological

innovation. In response to the ban from the United

States, one of Huawei's key strategies has been to

increase its investment in its subsidiary "HI Silicon

Semiconductor," which specializes in chip

development. This move has enabled Huawei to

reduce its reliance on American companies such as

Qualcomm and Intel. In addition, Huawei has

intensified its R&D of the "Kirin chip," ensuring that

it can continuously provide competitive smartphones

even under technological blockades. Meanwhile,

Huawei has further reduced its dependence on

Google's software ecosystem by developing

HarmonyOS. With its R&D capabilities, Huawei has

maintained its competitive edge under the

technological blockades and positioned itself at the

forefront of the next-generation technology field.

In addition to independent innovation, Huawei

has dramatically benefited from the policy support of

the Chinese government. In response to the complex

situation of technological blockades, Huawei has

been actively adjusting its strategy to align with the

comprehensive policies of the Chinese government.

The Chinese government has implemented a wide

range of incentive policies to bolster the development

of high-tech enterprises. In 2024, the Chinese

government's policies for enterprises led to

approximately 366.75 billion US dollars in tax

breaks, fee reductions, and tax refunds. With the

strong support of the Chinese government in

technological innovation and independent research

and development, Huawei can secure support in

multiple aspects, such as funding and tax relief.

Specifically, Huawei has actively taken advantage of

the numerous financial incentives the Chinese

government provides, including tax breaks and

subsidies. These measures have injected enough

funds into Huawei's R&D projects and significantly

accelerated the company's technological innovation,

particularly in crucial technological domains such as

chips and operating systems. As a result of these

strategic adjustments and policy supports, Huawei

can effectively counter the effects brought about by

the technological blockades.

4.2 WO Strategy

Although Huawei has significant technological

advantages, its reliance on foreign technologies has

shown apparent flaws in the context of the

technological blockades. In response, Huawei has

strategically leveraged its capabilities to address these

weaknesses through targeted adjustments.

Huawei has accelerated the development of

domestic alternative technologies. Huawei is highly

dependent on foreign technologies, especially in key

areas such as chips and operating systems, which has

placed it under immense pressure due to

technological blockades. However, the rapid

advancement of technology in China's domestic

technology industry has given Huawei opportunities

to utilize domestic resources as substitutes for foreign

Technological Blockades: Huawei’s Strategy Adjustment Response

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technologies. Huawei is reducing its reliance on

foreign suppliers by intensifying its research and

development efforts in domestic alternatives.

Through strategic partnerships with Chinese

semiconductor enterprises like Semiconductor

Manufacturing International Corporation (SMIC),

Huawei has made significant progress in producing

domestic chips. SMIC has become a major supplier

of Huawei's 7nm chips (Tse et al., 2024). This

collaboration has diminished Huawei's reliance on

American chip technologies. By promoting domestic

alternative technologies and driving independent

technological breakthroughs, Huawei has maintained

its development despite the ongoing technological

blockages.

In the face of the technological blockades, talent

recruitment and retention have emerged as critical

issues. The technological blockades have led to a

significant loss of technical talent, particularly for

those from Western countries. To compensate for this

deficiency, Huawei has actively implemented

government talent development policies, such as the

"Talent Introduction Fund," to attract top experts in

fields like artificial intelligence, semiconductor

design, and operating systems. By the end of 2024,

R&D personnel at Huawei accounted for 54.1% of the

total workforce. The strategic use of these talent

introduction funds has enabled Huawei to attract

high-quality researchers and ensured its continuous

technological innovation. In the context of complex

talent mobility, this approach has guaranteed that

Huawei can continue to develop competitive

technologies and maintain its leading position.

4.3 ST Strategy

Due to the technological blockades imposed by the

United States and the geopolitical landscape, Huawei

faces tremendous political and economic pressure in

the international market. To reduce these risks,

Huawei's strategic focus is to enhance its core

advantages.

One of the key strategies Huawei can use to deal

with international pressure is to expand its domestic

market layout. Huawei enjoys a strong brand

awareness and consumer base in the domestic market.

This strategy provides Huawei with stable revenue

and enables it to maintain growth when facing

external challenges. Meanwhile, the domestic

market's demand for high-tech products remains

strong, and the Chinese government has provided

policy and financial support to technological

innovation enterprises. Although the international

market is restricted, the domestic market remains an

important strategic market for Huawei. Especially in

the current context where the trend of globalization is

restricted, exploring the domestic market has become

an important strategic direction for Huawei. With the

support of domestic policies, Huawei's share in the

domestic market has been continuously expanding.

Despite fierce competition from domestic rivals such

as "Xiaomi" and "oppo," Huawei still holds a

considerable share of the Chinese market thanks to its

leading position in 5G technology and the field of

smartphones. Huawei has rapidly advanced the

construction of 5G networks across China and

launched consumer products represented by the Mate

X series of foldable screen mobile phones and the

bright screen series in the domestic market.

According to CounterPoint Research, in the fourth

quarter of 2024, Huawei ranked first in China's

smartphone market, with a market share of 18.1%,

returning to its market position after the US blockade.

These products have further consolidated their

advantages among domestic consumers and enhanced

their competitiveness in the Chinese market.

4.4 WT Strategy

Huawei has made several strategic adjustments to

cope with internal and external disadvantages. These

strategic adjustments include adjusting the global

strategy, entering emerging markets, diversifying

global risks, etc.

Due to a series of technical restrictions

implemented by the US government, including the

ban on using chips, operating systems, and natural

services from US enterprises, Huawei's ability to

expand its traditional market business in Europe and

the United States has been undermined. Therefore,

Huawei has no choice but to readjust its global

strategy, gradually shifting from a layout highly

dependent on the European and American markets to

diversified development and seeking new growth

points. Southeast Asia, Africa, and the Middle East

have become Huawei's development directions. By

expanding its influence in these regions, Huawei has

effectively reduced its reliance on Western markets

and diversified risks in the international market. For

example, Huawei has expanded its business scope

using the Belt and Road Initiative (BRI). Through

strategic partnerships and joint ventures, Huawei has

played a key role in constructing 5G infrastructure

and telecommunications in Southeast Asia, Africa,

and the Middle East. For instance, in South Africa,

MTN South Africa collaborates with Huawei and

China Telecom to promote the development of

technologies such as 5G, cloud computing, and

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artificial intelligence to strengthen the construction of

digital infrastructure. This regionalization strategy

has reduced Huawei's risk of being restricted in the

European market due to technology blockades.

In response to the tense political situation, Huawei

is also committed to diversifying global risks by

targeting new markets. In addition to Southeast Asia,

Africa, and the Middle East, Huawei has also

deepened its participation in Latin America, where

the political environment remains relatively neutral

towards Chinese enterprises (Kalam et al., 2025).

These regions offer significant opportunities for

Huawei to expand its telecommunications

infrastructure and electronic business while

minimizing the risks brought about by technical

sanctions and political pressure to the greatest extent.

5 CONCLUSION

Facing the technological blockades imposed by the

United States, Huawei successfully dealt with the

challenges brought by its strong technological

capabilities and strategic adjustment measures. By

increasing investment in research and development,

Huawei has maintained its technological leading

position in key areas such as 5G. Meanwhile, Huawei

has also reduced its reliance on foreign technologies

through strategies like policies, talents, and the

development of alternative technologies. The

adjustment of Huawei's global strategy has

effectively mitigated the impact of technological

blockades. This series of strategic adjustments helped

Huawei maintain its development amid the threat of

technological blockade and provided valuable

experience for other enterprises. Other enterprises

must rigorously analyze their strengths and

weaknesses, combine them with the background, and

explore strategic adjustments suitable for themselves

in the face of technological blockades.

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