Huawei First-Half 2026 Net Profit Falls 36% to $3.54B Despite 9.6% Revenue Growth, as R&D Spending Hits Record 25.9% of Sales

Huawei reported on August 31 that net profit for January-June 2026 fell 36% to 23.81 billion yuan (~$3.54 billion), an acceleration from the 32% profit decline recorded in the same period a year earlier, even as revenue rose 9.6% to 467.82 billion yuan (~$65.7 billion). The company said the profit squeeze was driven by rising input costs — including a memory-chip price crunch — and record R&D spending, which climbed 25% to 121.38 billion yuan, equivalent to 25.9% of revenue, as Huawei continued to pour resources into AI chip development. Day-to-day operations consumed 39.88 billion yuan in cash in H1, compared with generating 31.18 billion yuan in the same period last year, while inventories rose 42% from end-2025 as the company stockpiled components. Huawei said the results were in line with its own forecasts but that its full-year outlook remains under review because of external uncertainty and elevated input costs, underscoring the financial cost of the company's post-sanctions push toward chip self-reliance.