Huawei started by reselling Hong Kong phone switches with $5,000 in capital
Huawei was registered in Shenzhen in 1987 with RMB 21,000, then about $5,000, put up by Ren Zhengfei and five partners. Its first business was reselling office telephone switches imported from Hong Kong. By 2012 it had overtaken Ericsson as the world's largest maker of telecoms equipment.
Ren, a former deputy director in the People's Liberation Army engineering corps, arrived as China was trying to rebuild a weak phone network that depended entirely on foreign technology. While reselling imported switches, Huawei took them apart to learn how they worked and poured money into research; by 1990 it had about 600 people in R&D and was selling its own switches to hotels and small businesses.
Rather than fight Alcatel, Lucent and Nortel head-on in big cities, it sent salespeople from village to village in poorer regions from 1992, building up from the countryside. Its C&C08 switch of 1993 was the most powerful available in China, and a contract for the army's first national telecom network cemented useful relationships. From 1996 Beijing explicitly favoured domestic suppliers and promoted Huawei as a national champion. Abroad, it entered African markets in 1998, and by 2020 had helped build roughly 70% of the continent's 4G networks. A $10 billion credit line from China Development Bank in 2004, tripled in 2009, let customers finance its equipment cheaply, and in 2005 foreign orders exceeded domestic ones for the first time.
Even the name took effort. Ren said it came from a wall slogan meaning China has achievements. When foreigners struggled to say it, the company kept the name and ran a campaign nudging them toward Wah-Way, with Ren insisting it must not sound like Hawaii.
Its rise has been shadowed by controversy: a settled intellectual property dispute with Cisco, questions about state subsidies and influence, security concerns that led some countries and carriers to avoid its gear, and US sanctions from 2018 that pushed it to sell its Honor phone brand in 2020.
Source: Huawei
