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The Big Story

Huawei's rapid rise is driven by a global talent hunt

Chinese telecom giant has spent big to attract scientists and engineers from its rivals

LAULY LI and CHENG TING-FANG, Nikkei staff writers | China

TAIPEI/SHENZHEN/CHENGDU, China -- Four years ago, headhunters started calling a top engineer at Taiwanese smartphone maker HTC. They were persistent, calling three times a week -- but the engineer, who asked to be identified only as Emily, turned down their overtures.

Others could not resist the opportunity. Over the next few months, dozens of her colleagues -- including the engineers who made up the "Magic Lab," HTC's most important research and development team -- took up offers from recruiters to join Huawei. Some were offered as much as twice their existing salaries to make the switch, as the company, at that time just a producer of low-end smartphones, snapped up the talent it needed to challenge market leaders Samsung Electronics and Apple.

"Huawei was the most aggressive company when it came to attracting us to work for them," Emily told the Nikkei Asian Review. "Three out of five people I knew leaving HTC at the time were going to Huawei, and they were all the crucial talents that knew how to build premium phones."

Huawei's drive to become the world's largest smartphone maker has been fueled by an aggressive global hunt for science and engineering talent. The company made its first smartphone, running on the Android operating system, a decade ago. In 2016, the year after it enticed dozens of staff from HTC, Huawei shipped 30% more smartphones than it did in 2015. In 2017, it sold more than 150 million handsets; in 2018, it shipped more than 200 million.

The company says that it now has 800 physicists, more than 700 mathematicians and 120 chemists working for it. Among those hires are high-profile figures such as the award-winning engineer Tong Wen, and the Italian microwave technology expert Renato Lombardi, who runs a global research facility for Huawei in Milan. Eighty-five thousand of Huawei's employees -- 44% of its total headcount -- work in R&D, Huawei spokesperson Joe Kelly told Nikkei, including 20,000 working on fifth-generation technology alone.

Huawei also sponsors universities to the tune of more than $300 million per year, and maintains a specialist research unit, called the "2012 Laboratories," which focuses on developing technologies that will give it an edge decades in the future -- from DNA data storage to atomic-scale manufacturing and optical computing. The company said that it invested $1.5 billion in developing artificial intelligence last year.

Some in the industry say that Huawei poaches more than talent from its competitors. The company has been engaged in lawsuits with the U.S. telecom carrier T-Mobile, telecom equipment makers Cisco Systems and Motorola, and semiconductor startup Cnex Labs, all of which allege that their Chinese rival stole technology. Huawei denies all allegations of wrongdoing.

Even some of Huawei's own suppliers are suspicious. "To be honest, although Huawei is an important client for us, we have to stay vigilant when their people visit our facilities," one executive at a company in Huawei's supply chain told Nikkei. "Their staff are often quite eager to know the parameters of our equipment, the materials we use and details of our processes."

Fears of corporate espionage, combined with Huawei's close links to the Chinese government, contributed to the U.S. government's escalating crackdown on the company. In May, the U.S. Department of Commerce put Huawei on its "Entity List," a trade blacklist that prevents American companies from selling technology to Huawei. In August, the U.S. government added 11 Huawei research institutes, including the Milan research institute that employs Lombardi, to the Entity List.

Huawei has hit back, launching an even more aggressive talent hunt with even greater incentives for R&D talent, including 2.01 million yuan (around $282,000) starting salaries for newly graduated young employees with doctorates. Its average salary of $300,000 for AI specialists is now higher than some senior engineer positions at companies such as Apple and Google, according to job recruiting platform Glassdoor.

Those large sums may be tempting, but further crackdowns could still limit the company's ability to bring in researchers. Alex Capri, senior fellow in the Business School at the National University of Singapore, said that Huawei's aggressive expansion into R&D has made it a magnet for talent, but "this is all coming under increasing scrutiny and will likely be the subject of further technology licensing and controls."

Nikkei staff writer Nikki Sun in Hong Kong contributed to this report.

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