What's behind Huawei's UK expansion?

By Chris Middleton
12 Jun 2014 View Comments

Signs that Bristol is fast becoming Silicon Gorge continued this week with the announcement that Chinese telecoms giant Huawei is opening a new R&D centre in the city, as previously reported by Computing.

The £125m facility will focus on chip and software research and open by the end of this year, employing 30 people. 

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But high-tech hotspot Bristol is a small part of a much bigger picture for the company, which is the world's number three smartphone maker but is better known in Europe for supplying telecoms and networking equipment.

Huawei has 15 UK offices, including in Reading, Banbury and Ipswich, and roughly 900 UK employees. It aims to employ 1,500 in the country by 2017.

The Bristol announcement throws a spotlight on an ambitious three-year plan for the company. Huawei employs 7,700 people across Europe, with 5,500 more slated to join in the months ahead, according to the company.

It aims to double the number of R&D employees in the region alone to 1,700.

But the move also highlights the UK's growing but complex relationship with the Chinese company.

Fears about the firm's spread and influence have been aired in the UK and US governments, leading to worries about purchasing Huawei equipment in case China uses it for espionage. 

Huawei's Banbury HCSEC operation, aka 'The Cell', is monitored by GCHQ, which has insisted on oversight of senior appointments at the facility.

One person that the UK's own mandarins might speak to for reassurance would be former government CIO John Suffolk, who is Huawei's global head of cyber security as well as technology adviser to the World Bank.

Based in London and Shenzhen, and reporting to Huawei's CEO, Suffolk is directly responsible for the company's end-to-end cyber security assurance system, adopted globally by all its business groups, including R&D and the supply chain.

But whatever the UK's fears about Huawei, its investment muscle has proved hard to resist. The company is mainland China's largest single investor in the UK and it plans to invest £650m and procure £650m in services in the country, again by 2017.

Huawei's three-year plan for Europe is ambitious for a simple reason: its EMEA revenues of roughly $13.6bn are more than from the Asia-Pacific and Americas regions combined. And the signs are that those are nowhere near enough for the firm.

Banbury's local MP, Sir Tony Baldry, put it best in December last year when he said that it was essential to "balance national security with the need to see trade with China prosper".

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