Huawei Global Analyst Summit 2022

Welcome to the 19th Huawei Global Analyst Summit. In his keynote speech, rotating chairman Ken Hu will talk through Huawei's business strategy for 2022 and highlight the value we are creating for our customers by pioneering digital solutions for a growing range of industries. We'll explore how Huawei's commitment to research and innovation is having a large impact on the ICT industry and how some of those innovations are speeding up a much-needed journey to a low-carbon society. Dr. Zhou Hong, President of the Institute of Strategic Research, will share with us the technologies the ICT industry needs to develop and the questions it needs to answer over the next 10, 30, and as far out as the next 50 years if our industry hopes to realize some of the visions we have for the future. Both of these speeches will be in Mandarin and will be simultaneously translated into nine different languages as this event is live-streamed across the world. Following these speeches, we will open up the floor to questions from both here and online. The Q&A session will have consecutive translation and will last around 45 minutes. And I think we're about done. And without further ado, please join me in giving a very warm welcome to the stage to the President of the Institute of Strategic Research, Dr. Zhou Hong.

Welcome to the 19th Huawei Global Analyst Summit. It's my pleasure to share with you some scientific hypotheses and business visions we have for the future. The 18th century is the Machine Age, the 19th century is the Electrical Age, the 20th century is the Information Age. Then what will the 21st century be? I think the 21st century will be a fully intelligent one for society. At the core of intelligence is sensing, connectivity, and computing capabilities that will lead to better understanding of matter, phenomena, beings, and energy. In order to get there, in order to enter into an intelligent world, we will have to address enormous challenges. How can we provide much greater sensing, connectivity, and computing capabilities required for happy lives, efficient work, and environmental protection? We have to improve the capabilities by hundreds of thousands of times. How can we create a viable path forward when ICT technology has seen little if any breakthrough over the past few decades? Moving forward, we must come up with both hypotheses and visions and push the limits of theory and technology to make a leap.

Over the past decade, broadband communications, smart devices, AI, and cloud computing are rapidly evolving. Digital technology has enriched our lives, making it possible for us to surf the internet, send instant messages, navigate with the maps app, use e-banking, and shop online. ICT has become an integral part of our lives. Meanwhile, in addition to those ICT technologies, Huawei has been exploring with partners across industries as for how to enable different industries with ICT technology. For example, we have worked with automakers and telecom operators. We have run tests of connected cars on the highway. As we know, a human driver can respond to a situation within seconds. Thanks to the high-performance V2V and V2X connectivity, we're able to improve the times of detection and response by 100 times. And we are able to shorten the 100-meter safety distance to 0.8 meters. And such a solution is able to improve road safety and capacity. The solution also supports platooning, which can reduce jams and is able to save us 20% of fuel. Connected cars can be used for remote driving, which will generate new operational and service models. And we have also conducted trials in urban settings and found that vehicle-to-line-of-sight and vehicle-road coordination can increase traffic efficiency by 30% and reduce accidents by 90%. Today, ICT technology has been used in factories, hospitals, ports, coal mines, and other industries to enable digitization and intelligent transformation.

In the future, we will see more fields benefit from the use of ICT technology. For example, fitness and well-being: wearable sensors, wireless communications, and cloud computing can be used to track fitness and health and manage chronic diseases. AI computing can speed up the development and the screening of drugs and vaccines. ICT-enabled automated and intelligent robots, potentially everywhere, can improve people's lives and industrial productivity. ICT can also help build a greener, sustainable society. For example, it can enable more cost-effective and efficient solutions to energy conversion and scheduling, design of conversion catalysts, and storage materials. In the hybrid digital world, ICT technology can contribute to the creation of lifelike, immersive experiences, enriching people's lives, facilitating learning, and expediting iterative optimization in industries.

Global digitization is growing at an exponential rate driven by intense demand. The global MBB data increased from 0.24 exabytes per month in 2010 to 60 exabytes per month in 2020, a 250-fold increase in 10 years. The MBB data in China grew from 0.033 exabytes per month in 2010 to 13 exabytes per month in 2020, a 400-fold increase. We believe digital technology will develop at a rate of over 100 times in the coming decade. Digitization will accelerate the development of humanity and the world. We have also noted that many theories and technologies that we use today were proposed decades or even a century ago. We start to come across bottlenecks in their applications, such as the Nyquist sampling theorem and Shannon's theorem for communications, computability theory and von Neumann architecture for computing, and Moore's Law for semiconductors. We hope that new hypotheses and visions will come into being and guide us to breakthroughs. Therefore, we are proposing four pairs of scientific hypotheses and business visions, and we want to explore and research these together with academia and industry partners.

First, we should push the boundaries of knowledge through exploring science and cutting-edge technology, particularly in physics, chemistry, and biology. This will help us create new materials and components, such as molecules, catalysts, and proteins, as well as new equipment and processes. I once had the opportunity to discuss with a professor about how to store photons and quantums. He proposed the concept of quantum storage in 1993, but at that time, few people believed it possible. There were doubts about storing light in a bottle and worries that this way of storing quantum would affect its state. In 1998, physicist Lene Hau and others slowed down light to 17 meters per second by applying electromagnetically induced transparency. In 2000, she was able to stop light for one minute. In 2006, Jerome Faugier at Imperial College London and others performed something similar to a photon black hole to trap the light. Now, many methods have been developed to realize quantum storage, paving the way for the implementation of quantum communications and quantum computing. To reduce power consumption and enhance reliability, we are also working with researchers to explore the thermal mechanism in semiconductors to see if we can create conditions to accelerate the conversion of optical phonons to acoustic phonons, reducing their thermal spots formed between the gate and the drain. Many of the superconducting quantum computers operate at millikelvin temperature. Some researchers are exploring ways such as freezing atoms with laser beams, lowering the temperature by 1 million times to a nanokelvin temperature, approaching the limit of absolute zero, to see if more complex quantum phenomena would occur. Will it be possible to predict the properties of new materials through computation rather than lengthy experiments? The answer is positive. For example, using the ab initio computation method with computing power of 1 million core hours, we can calculate the major properties of molecules composed of up to 200 atoms. In 2017, through computation, researchers revealed the structure of a superhard tungsten pentaboride. This solved a puzzle that had plagued the scientific community for 60 years. In 2019, researchers computed and discovered that lanthanum decahydride at a pressure above 850,000 bars exhibited amazing high-temperature superconductivity, and the critical temperature was found to be minus 112 degrees Celsius. With more advanced computational chemistry, it's possible to identify better catalysts, chemical pharmaceuticals, biopharmaceuticals, and vaccines.

Second, we will transcend biological limits to better understand nature and ourselves, going near and beyond human sensing, from sensory substitution to sensory enhancement, and from human to machine sensing. We can draw inspirations from nature. Through billions of years of evolution, animals have developed more acute sensing capabilities than machines and humans. Take vision as an example. Some spiders far outperform humans in detecting contours of objects and computing motion, which helps them prey. I think autonomous driving may need such spider eyes. Then there are frog eyes, which are highly sensitive to single photons and have excellent night vision. And also, dogs can smell 1,000 times better than humans. In addition, the enhanced sensing capabilities can add to our sensing and control of bodies. ECG, EEG, and PPG systems have not yet become widely affordable and democratized. There is a long way to go before we can all easily monitor the eight body systems. In the future, new types of sensors can enable real-time and unobtrusive measurement of important health indicators such as blood pressure, blood sugar, and electrocardiograms. Brain-computer and muscle-computer interfaces can be developed to enhance human-machine interaction. It may even be possible for humans to communicate, work, drive, and play with thoughts. New experiences of the hybrid digital world, such as 3D displays and tactile virtual reality, can be developed to bring physical sensations to the digital world.

Third, to better understand the world, solve problems, and create value, we need new computing models that are adaptive to different purposes and environments and easy to implement. With the advances in information theory, over a dozen computing models have emerged and seen wide adoption. For example, the butterfly structure in fast Fourier transform commonly seen in wireless and optical communications, the finite state machine model which supports state transition used in routers, and the most recent statistical and correlation-based models using AI applications. They are the fruits of the hard work of generations of mathematicians and engineers. Should we stop here? No. I believe there's ample room for further exploration. As communication systems continue to evolve towards high frequency and high speed, there will be more challenges that come with non-linear channels and components. Can we shift from the linear Fourier transform to the non-linear inverse scattering transform to better match future applications? Statistical models that are widely used in today's AI computing cannot be explained or debugged and are highly energy-inefficient. To address this, can we learn from living creatures? An ant's brain consumes just 0.2 milliwatts of power but can run around and process many activities like nesting, finding food, and herding efforts without the need of deep learning or following the von Neumann architecture. In contrast, an autonomous vehicle consumes dozens or hundreds of watts, which is far less energy-efficient than an ant. So, can we go beyond statistical and correlation-based AI computing models to invent mathematical logic-based, geometric manifold-based, or game theory-based computing models? Matrices are widely used in scientific computing. The complexity of multiplying two m-by-n matrices is the third power of n using the simple algorithm. In 1969, the Strassen algorithm invented by the German mathematician reduced the complexity to 2.807 power of n. By 2020, Virginia Williams from MIT and Josh Alman from Harvard proposed an algorithm reducing the complexity to the 2.3728596 power of n. In terms of matrix computation, we are more focused on solving sparse linear systems of equations. There are a few billion people on Earth, but each person maintains no more than 200 relationships. In chip design, most component constraints are local. Richard Peng from Georgia Tech and his team created an algorithm with a complexity of the 2.3316 power of n and won the 2021 best paper award from SODA, a leading symposium on computational theories. A few months ago, our mathematicians created a revised algorithm, further reducing the complexity to the 2.28 power of n, where the power is 0.0516 less. What does it mean? Well, if n equals 1 million, the computational complexity can be further reduced by about 45%. In terms of model implementation, a supercomputer often consumes immense power to deliver high performance. For example, 500 petaflops of computing capacity requires 30 megawatts of power. However, a human brain can achieve about 30 petaflops with just 20 watts of power, which is 80,000 times more efficient. Therefore, shall we go beyond the conventional computability theory and the von Neumann architecture to develop adaptive and more efficient computing models and explore new architectures and components?

Fourth, going beyond the channel limit to unleash the full potential of ICT, stretching the limits of space and time. We may want to explore ways to build real-time global connections, helping converge the physical and digital world and connecting robots everywhere. Uncompressed human-sized holographic communication will require 2 terabits per second of bandwidth and 1 to 5 milliseconds of latency. An autonomous vehicle with 12 cameras could generate up to 4 terabytes of data a day. And current 5G networks fall far short of providing such capability. Can we tackle these challenges theoretically and technologically? I believe so. In theory, if the physical world had memory, then we could move past Shannon's three theorems. From an engineering standpoint, one quantum cascade laser can emit hundreds of different wavelengths at the same time, generating 100 terabytes of traffic. A high-frequency attosecond laser, once developed, may even generate millions of terabytes. If these technologies are applied to wireless and optical communications, could we improve communication performance by up to 10,000-fold? To bridge scientific hypothesis and business vision, Huawei devised the innovation process into five interconnected stages, from hypothesis and vision to innovations in theory, technology, and business. Comparably, innovations related to hypotheses, visions, and fundamental science take longer time to yield results. We would dare to seek answers through innovations in fundamental research. In addition to supporting broad-conjunct innovations which are driven by interest, we hope to work with partners to drive innovations in the pastor's quadrants. Together, we can extend the reach of scientific knowledge while simultaneously creating value through application. Based on these four pairs of hypotheses and visions and a focus on the pastor's quadrants, we have identified two fundamental scientific questions and eight technological challenges. The first scientific question is: how do machines perceive the world, and can we build models that teach machines how to understand the world? The second is about understanding the physiological mechanisms of the human body, including the working mechanisms of the eight body systems, as well as human intentions and intelligence. The technological challenges are: for human-machine interfaces, how can we develop new sensing and control capabilities through brain-computer and muscle-computer interfaces, 3D displays, virtual touch, smell, taste, and others? How can we continuously and unobtrusively monitor blood pressure, blood sugar, and heart? Can we use strong AI to discover new chemical pharmaceuticals, biopharmaceuticals, and vaccines? How can we develop application-centric, efficient, automated, and intelligent software for greater value and a better experience? In communications, how can we reach and circumvent Shannon's limit and deliver efficient, high-performance connectivity both regionally and globally? In computing, how can we develop more adaptive and efficient computing models, novel von Neumann architectures, unconventional components, and explainable and debuggable AI? In materials, how can we leverage AI to develop new molecules, catalysts, and components and processes? Can we go beyond CMOS fabrication process for lower cost and higher efficiency? In energy, can we develop safe and efficient energy conversion and storage and on-demand services? With an open mind, Huawei is innovating with partners around the world. On April 30th, we will be launching virtual Charles Park. It will serve as an open platform where people exchange ideas on science and technology. Through Charles Park, we will put together the most pressing challenges in the industry and invite the best minds around the world to take a crack at these challenges together. 30 years ago, when I was in college, people had to queue up to make a long-distance call. None of us could have imagined that one day we would be able to video chat with our families anytime, anywhere, with only a small wireless gadget. And today, we're using this same gadget to do much more, connecting ourselves with the rest of the world. It all would have sounded like science fiction to us back then. Everything we imagined today is too little for tomorrow. We wish to join hands with the academic community and industry partners to put forward both hypotheses, rethink fundamental theories, relationship architecture, and reinvent software. Together, we can create the future. Thank you.

Ladies and gentlemen, President of the Institute of Strategic Research, Dr. Zhou Hong. Thank you very much. That's certainly going to keep us on our toes for the next 10 years. In just a minute or two, we're going to invite our rotating chairman to share his business strategy with us. First, we have a video of the highlights of Huawei's 2021 year.

In 2021, we continued to find ourselves in a complex and volatile global environment. Despite that, we kept working with our global partners to create greater value for both our customers and society at large and maintain solid operations. Our revenue was 636.8 billion yuan, and net profits amounted to 113.7 billion yuan. Huawei rose to number 44 on the Fortune 500 global list for 2021. From tech innovations to open ecosystems and creating social value, we will never stop exploring. In 2021, our total R&D expenditure amounted to 142.7 billion yuan, equaling 22.4% of the company's total revenue. We topped the global ranking of WIPO in 2021 with 6,952 patent applications. As a leader in innovation, Huawei provides high-quality mobile broadband services to more than 60 million people in remote villages in over 70 countries to reduce poverty. Working with carriers and partners, we have signed more than 3,000 commercial contracts for industrial 5G applications, using 5G to create more value across a range of industries. Huawei is also working to create a digital ecosystem where all players create and share value. To date, 267 Fortune Global 500 companies have chosen Huawei as their partner for digital transformation, and over 30,000 partners are working with us to serve the enterprise market. By the end of 2021, HarmonyOS had been deployed to more than 220 million Huawei devices, making it one of the world's fastest-growing mobile device operating systems. The number of Huawei Cloud, MDC, and Ascend developers continue to jump, further solidifying the foundation of the digital world. Huawei's Seeds for the Future program has trained more than 1.54 million digital professionals. The number of Huawei ICT academies has grown to 1,971 globally by the end of 2021. As an active contributor to a green and sustainable world, Huawei purchased 1.75 billion kilowatt-hours of clean power, equivalent to reducing 848,000 tons of greenhouse gas emissions. The environment will benefit more than just us. The forests, oceans, and wetlands are also neighbors. Green Revolution: we're using innovative technologies to protect nature and endangered species. We proudly work with the best minds from all over the world. Huawei ranked 8th on the Forbes list of the world's best employers in 2021. We believe open collaboration is the only path to shared progress and prosperity. Together, we're building for tomorrow.

Ladies and gentlemen, for the second keynote speech, please join me in giving a very warm welcome to the stage our rotating chairman, Mr. Ken Hu.

Ladies and gentlemen, our rotating chairman, Mr. Ken Hu. I would like to thank both Mr. Ken Hu and Dr. Zhou Hong for their valuable insights. I think we can all agree there's some very interesting opportunities for Huawei in the ICT industry. As you can see, the stage has been set up now, and we'll shortly open up the floor to questions.

Before we start, I think just a few housekeeping points. If you'd like to ask a question in the audience, please raise your hand, and when I acknowledge you, we'll bring over a microphone so that we can hear you clearly. For everybody else who's joining us online, please raise a digital hand, and we will unmute you when you're called upon to ask a question. Please ensure that you keep your video on if you are online and anticipate asking a question. And please remember to put your name and your organization's name on your on-screen furniture so we can call upon you when the time comes. In the interest of time, we'll keep everybody to one question each so we can get through as many questions as possible in the time allocated to us. You may ask your question in either English or Mandarin, and our interpreter, Yu Lei, who will be joining our speakers on stage, will translate both your questions and the corresponding answers. And for everybody, whether online or offline, please remember to state your name and the organization you represent before you start your question. I think we're just about ready, so I'd like to invite Mr. Ken Hu, our rotating chairman, back onto the stage, as well as Mr. David Wang, Executive Director of the Board and Chairman of the ICT Infrastructure Managing Board. Both of them will be answering your questions today.

Right, I think we're just about ready to start. We will take our first question from the audience. If you'd like to ask a question, please raise your hand. All right, this lady in the red, I think you had your hand raised first. Please go ahead. Let's take your microphone over here.

This is a question from Shenzhen Economic Daily. Huawei has set the goal of surviving and doing so sustainably for 2022. To achieve this goal, what will be Huawei's focus areas this year? What are the challenges facing the company?

Thank you very much. I think we'll take the next question from online. If you'd like to raise your digital hand, please. All right, I think we will go next to the People's Post and Telecom. The gentleman over there, please go ahead. Let's unmute the microphone there, please. Go ahead and ask your question, please.

What's the latest news? Huawei has said many times that it will continue to innovate and lead the industry. You raised the 5.5G for wireless, and today Mr. Ken Hu talked about 5.5G for fixed networks. What are the thoughts behind these visions of Huawei, and how are you going to benefit the ICT industry with these visions?

Thank you, Ken. I'll agree with you that the connectivity industry is not a sunset industry but rather a sunrise industry. Without connectivity, there simply isn't a base for the intelligent world. If every individual household, organization stays disconnected, there is no intelligence whatsoever in a world like that. In the communications technology, actually, there are two primary parts: one is the fixed networks and the other is the wireless networks. And basically, these two areas of the communications technology evolve into the next generation every 10 years. And around 2020, 5G came into the world as one generation of the wireless technology. And if we talk about the next generation of the wireless technology, that would be the sixth generation, the 6G. According to what I have explained, it will at least be around 2030 when we are ushering 6G into the world. As we believe that when it is in between two generations of the technologies, they should not just stop there; they should continue to evolve and move forward. And that is why, two years ago, when 5G was first deployed, we started to work with the industry to come to think and define what should happen, what should evolve as a next step between 5G and 6G.

5G has been developing pretty rapidly over the past two to three years. So far, over 200 telecom operators have launched the commercial rollouts of 5G technology with the number of subscribers of over 700 million. But we have noted that there are still quite a few limitations of the 5G technology. One of them is the uplink and downlink speeds, and another area is around the latency. Its level of latency is not yet sufficient to support a myriad of services and experiences, and it is still having some gaps in supporting the IoT services. And that is why we, together with the industry players, are envisioning 5.5G. And the consumers can feel about the change, the difference that 5.5G is about to bring around 2025. The downlink peak speeds can reach 10 gigabits per second for the consumers. That's what Ken talked about in his presentation, the 10 gigabits per second everywhere goal, and the uplink speeds could reach 1 gigabit per second.

5.5G, the speed is supposed to reach 1 gigabit per second everywhere and with peak rates of 10 gigabits per second. And during the pandemic, we have felt deeply that some of the broadband services are falling short. For example, the home broadband, the fixed line I use at home, you might notice that you might feel that the Wi-Fi is low, and in different rooms, you have different rates for the Wi-Fi. And when you watch the video, it is stuttering, and when your children are receiving education, joining the online classrooms, they are having the issues of long latency. And noticing these problems, that's why we have worked with the industry to together envision the next step of evolution for the fixed networks. We believe, as a leading player in the communications industry, it is part of the responsibility to do so. And we also think that the cadence for a 5.5G should be similar to that of the wireless 5.5G, and that means that it should be out there around 2025. And by that time, 5.5G should provide households with 10 gigabits per second anywhere. So if you notice, the difference in my answers is actually different with the wireless answer because in the wireless 5.5G, I was talking about the peak rates, but for the F5.5G, it's actually 10 Gbps anywhere. So it means that it will have to deliver 10 gigabits per second everywhere with the peak rates of 50 gigabits per second everywhere. We believe that that's the level of peak rates we need to guarantee in order to deliver effective 10 gigabits per second everywhere with the F5.5G, and both our uplink and downlink rates would have to reach 10 gigabits per second. And that is the way we can guarantee much better services and experience for the home broadband.

This vision will rely on the concerted efforts of the different players in the communications community, including the suppliers, the equipment vendors, as well as the telecom operators. Through concerted efforts, then we can achieve the vision of 5.5G for the wireless and 5.5G for the fixed networks, which is called F5.5G, by 2025. That can help us deliver better services for the users.

Thank you very much. Right, let's go back to the room for the next question. This gentleman over here in the glasses and the blue T-shirt.

This is a question from Xinhua News. From your presentation, we have learned of the growth of Huawei Cloud, and from the release of Huawei's annual report, we have learned about the specific numbers. So we would like to know more about the next step of Huawei Cloud and what would be its major focus.

All right, thank you very much. Let's go to the other side of the room over there. Anyone on this side of the room, I'd like to ask a question, please. Go ahead. Thank you. Go ahead.

My name is Henry, and I'm from Frost and Sullivan. So as per Mr. Hu's earlier sharing regarding the consumer business, my question is: what is the prospect of Huawei's consumer business, and what strategies does Huawei plan to adopt?

Thank you very much. Let's take another question from the floor. I think this lady had a hand up very quickly in the black waistcoat.

This is a question about the IAS business. I would like to understand more about the progress of your intelligent automobile business. And have you achieved the sales targets you have set for this business? And will you release any new cars this year?

All right, thank you very much. Let's go online now to a number of people who've been waiting patiently. If you'd like to raise your digital hand, but I can see Government Insider, you have your hand raised there. Please go ahead and ask your question.

Huawei has played an important role in digitalization during the pandemic. We have seen cases such as the 5G hospital in Thailand and the offshore floating solar farm in the Asia Pacific. Could you maybe share some insights on the successes and challenges of Huawei in promoting digitalization and green development in Asia Pacific, as well as any other upcoming plans in the region?

All right, thank you. We are officially over time, but I know there's still interest in a couple more questions. So we will take two more questions from the floor, and then we'll call it a night. The lady over there in the blouse and the glasses, you can take a microphone to her, please.

Now it's a question about the metaverse. A lot of the companies have launched relevant products and solutions with the metaverse. What's Huawei's understanding of the metaverse concept, and what plans do you have for launching relevant products and solutions?

As Ken pointed out, the metaverse industry, including the concept and technology, is now a great hype. I cannot call myself an expert in this regard, but I do have something to share with you. It's how our businesses are getting prepared so that we'll be ready when metaverse really arrives. We would like to work with the industry to support the truly immersive digital world and experience in the future.

Actually, the metaverse concept involves a seven-level model, and they are the infrastructure, devices, decentralized service layer, spatial computing, creative platform, application platform, and content platform. For us, we'll stay focused on what we have been focused on: the ICT infrastructure, cloud services, and intelligent devices. We insist on our focus, and then that will contribute our fair share to metaverse.

We have to have a fully converged physical and digital hybrid world, and it will raise higher demands for real-time communication, much lower latency, and much higher uplink and downlink bandwidths to satisfy the needs of the metaverse rendering. It will have to optimize the computing power as well. There have to be a much better integration between connectivity and computing and optimization. The 5.5G visions that we have advocated, as well as what Ken Hu has talked about in his presentation, redefining the computing architecture, are all parts of the broader efforts to help support metaverse in the future.

For the glasses and such wearables, as well as tactile devices, and we're working on the XR spatial hardware as well as 3D spatial video, and we have a large and shared tool for the city-level AR.

On application and creative platform, we will provide support through our Huawei Cloud services. As Ken Hu talked about in the presentation, the cloud service called the MetaStudio is a case in point. It's essentially a digital content pipeline, and it could be used for developing and creating content for the digital world. And these are all pretty good and impressive solutions for the future metaverse.

But as we have emphasized, metaverse remains in a hype. It is still in the very early phase of figuring out its path forward. It still needs time to explore and figure out the right technologies and get ready with the technologies. And Huawei will continue to leverage our master technology and capabilities, and we'll explore together with the different players and partners across the industry to try and identify potential scenarios of application in both B2C and B2B domains. We look forward to the ways that metaverse is going to change our ways of work and life.

All right, thank you. I think we'll have time for one last question from the floor. The gentleman over there in the gray polo shirt. This will be our last question tonight. Thank you, folks.

How will Huawei address the chip supply continuity? Are you building your own chip factories to address the supply issues? And what is your long-term plan for chip supply security? Could you share more about the patent you filed for 3D stacking? Do you think that is able to help you alleviate the pressure from the sanctions?

Chips was not a problem back in the old days, but in recent years, because of the impacts of the geopolitics and the pandemic, it is gradually becoming an acute issue. And the globally unified value chain for chips has been disrupted. And for ordinary people, they might not have heard of the chips a lot back in the old days, but now they have heard a lot about the shortage of various kinds of chips here and there during the pandemic. And people attach great attention to the chips, and they are very interested in how Huawei is doing.

The value chain is much more than the piece of chip that we see. The semiconductor value chain is actually a very long one, including several dozens of parties, including those working on the design, the manufacturing. In manufacturing, you see a lot of different tracks as well, and also packaging, and those working on the subsystems. So any company, including Huawei, is not able to work out the solution alone for the chip issues. For us to address the chip issues, we have to rely on the efforts of the whole industry, and we believe in the beauty of a globally unified supply chain for chips. And we don't believe the approach of decoupling or fragmentation based on various grounds. We think that it is bad for the ICT industry's development. It could slow down technology development. It may even lead to technology going backwards, and it will lead to higher costs, which will be further passed over to the consumers.

But also in this context, a lot of the countries in the world, including China, have started to make more investments in the semiconductor value chain, covering the different linkages along the value chain. And these countries and regions around the world are now improving their capabilities and capacities for the semiconductors. So we believe that there is a possibility that the shortage issue can be addressed in a few years. We really hope that these companies will succeed, and if they can succeed, they will help address part of the problems for the chips.

Our customers and partners have been supporting us, and they have shown an interest in our efforts and business. And I wonder if these problems could cause Huawei to lag behind in the product advancement. As Ken Hu has talked about, I am managing the development of ICT products and solutions. I'm also in charge of the R&D investment decisions. So I would like to say to the partners and customers: please feel rest assured. We have a holistic approach for product innovation. For the innovation in products and solutions, or to put it in other words, we have taken an approach of systems engineering to R&D. As Mr. Xu said in the conference of releasing the annual report, and as Ken just said, we have the various ways to ensure product innovation, including the efforts on exploring in the basic theories, our re-engineering efforts in both software and hardware. When we design the products and solutions, we think about how to optimize the whole system's performance. We think about what we can do in algorithms, in software, and we think about the efforts we can make in optical technologies and the RF technologies. So it's a holistic system of efforts that we are making to ensure the advancement of our products and solutions. And we have confidence in the upcoming years to maintain very competitive mainstream products of our business. We are very confident in continuing to deliver value to our customers in the coming years.

And as for the second question that the gentleman from NHK raised, it's about the patent we filed. It is a general-purpose technology, and it's called 3D packaging or chiplet technology for the chips. And we have years of accumulation of capabilities in figuring out how we can develop leading chips or systems while we don't have access to the most advanced processes. We actually filed that patent in 2019, and we have a number of innovations and patents due to the heavy investments we have made in R&D for a very long time in the past. And we are very confident in continuing to provide leading products and solutions to our customers and partners. Thank you.

Well, thank you very much for your attention, ladies and gentlemen. That's all we have time for today. I'd like to thank our speakers on stage, Mr. Ken Hu, Mr. David Wang, our earlier speaker Dr. Zhou Hong, and last but not least, our interpreter, Yu Lei. As you can tell from today's presentations, Huawei is committed to continuous innovation and is building a fully connected, intelligent world, creating value for all of our business partners. If you'd like to find out more about our future developments and some of the products and services that we have, please join our breakout sessions tomorrow. But for today, that's everything we have time for. If you have any further questions, please remember the Huawei communication team. But for now, it's thank you and goodbye.