Huawei unveils major Italy investment

Chinese telecom major Huawei Technologies Co plans to invest $3.1 billion in Italy over the next three years, making its latest move to leverage European technologies for future growth amid challenges from the US government, analysts said on Monday.

Thomas Miao, Huawei's Italian unit chief executive, said the investment plan would create 1,000 new direct jobs from 2019 to 2021, Italian news agency Ansa reported.

Specifically, the plan would consist of $1.2 billion invested in operations and marketing, and $1.9 billion in direct supplies of Huawei's products, while $52 million would be added for research and development activities, Ansa added.

As part of the overall investment plan, Huawei would spend around 2 million euros ($2.24 million) to build a laboratory with the University of Pavia in Italy. The laboratory is designed to develop chips, especially those at early stages, Russia's Sputnik news agency reported.

Starting operations in Italy since 2004, Huawei now employs about 850 people in the nation.

The new move came after Huawei said in May it plans to build and operate an optical device research and development base in Cambridge, the United Kingdom, within the next five years.

The expansion is part of a five-year 3-billion-pound ($3.75 billion) investment plan for the UK that the Shenzhen-based company announced last February.

Huawei is facing restrictions from the US government which added it to an Entity List in May, banning the world's largest telecom equipment maker from purchasing any US technologies without special government approval.

Although the US Department of Commerce said earlier this month that it would issue licenses to US companies seeking to sell products to Huawei when "there is no threat to national security", analysts said Huawei is already determined to shift more of its suppliers and research and development centers to Europe.

Wang Yanhui, secretary-general of the Mobile China Alliance, said amid the ban from Washington, Huawei is working hard to find European and Chinese alternatives to its US suppliers.

"Though the restrictions are relaxed to some extent, it was already very clear that the US market is not a level-playing field for Huawei. It must make strategic adjustments of its R&D layout," said Fu Liang, an independent analyst who has been following the telecom industry for more than a decade.

Huawei confirmed media reports that the company is shrinking its business in the US, with plans to lay off employees at its US-based research and development subsidiary Futurewei Technologies.