GUANGZHOU -- Huawei Technologies plans to spend $3.1 billion over three years in Italy, as the Chinese telecommunications group looks to solidify its presence in the key European market while it deals with the U.S. pressure campaign.
Thomas Miao, chief executive at Huawei's Italian unit, said Monday in Milan that the investment would add 1,000 jobs in the country through 2021, according to Reuters and other outlets. The company will spend $1.9 billion on procurement and another $1.2 billion primarily on sales promotion.
The announcement appears aimed at ensuring that Italy does not answer the American calls to blacklist Huawei from the 5G market.
Rome previously signaled a willingness to cooperate with the Chinese tech company in developing the fifth-generation wireless network. But last week, the government passed a decree granting itself greater powers to intervene in infrastructure projects, including those in communications.
Miao touched on the decree when announcing the multibillion-dollar investment. "It is very important that the 5G technology is neutral" to all suppliers, he said.
Europe represents Huawei's largest market after China. Last year's revenue from the operating region encompassing Europe, the Middle East and Africa amounted to 204.5 billion yuan ($29.7 billion), or roughly 30% of the company's total.
But since the latter half of 2018, the U.S. has lobbied European allies against adopting Huawei's technology, citing national security concerns. Huawei responded by opening a tech innovation laboratory in Germany last November and followed up with a cybersecurity transparency center in Brussels this March.
Huawei's spending in Italy suggests the company is trying to ease the impact of U.S. sanctions. In May, the U.S. Commerce Department banned software and component suppliers from doing business with Huawei without prior approval.
The restrictions also applied to non-U.S. vendors like Arm Holdings, the UK-based chip designer that suspended transactions with Huawei. Despite losing access to Arm's technology, Huawei is not expected to freeze production on smartphones, at least in the short term. Not only is Huawei developing in-house fabrication of semiconductors, the group apparently retains the right to exercise licenses for Arm's current models.
Huawei still faces the task of landing alternative sources of parts and technology. The company likely will expand its roster of suppliers in Italy and other countries.