[ 2021-03-03 ]

Huawei to more than halve smartphone output in 2021

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Huawei Technologies has notified its suppliers
that its smartphone component orders will fall by
more than 60 per cent this year, Nikkei has
learnt, as US sanctions continue to bite.

Huawei has notified suppliers that it plans to
order enough components for 70m to 80m smartphones
this year, according to people at multiple
suppliers. The range represents a more than 60 per
cent decline from the 189m smartphones Huawei
shipped last year.

The company’s component orders have been limited
to those for 4G models as it lacks US government
permission to import components for 5G models.
Some of the suppliers indicated that the figure
could be lowered to about 50m units.

The embattled Chinese tech giant last year fell to
number three in the global smartphone industry,
behind Samsung and Apple, according to research
company IDC. Huawei is likely to lose further
ground this year given the US export restrictions.
Huawei declined to comment.


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Huawei in November sold its Honor budget brand to
a consortium of more than 30 Chinese companies in
a bid to help Honor regain access to critical
components and parts subject to the US
restrictions.

Honor says it has resecured business relationships
with key suppliers, including AMD, Intel,
MediaTek, Micron Technology, Microsoft, Qualcomm,
Samsung, SK Hynix and Sony. It launched its V40 5G
smartphone in China last month.

While some of Huawei’s suppliers have obtained
permission from the US commerce department to ship
parts, the company still lacks access to core
components for 5G models.

There have been news reports that Huawei may sell
its mobile phone business altogether.

Asked about this, Ren Zhengfei, Huawei chief
executive, told a media outlet that he would
“never” take that path.


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But, according to an executive at one supplier,
Huawei has not been able to procure the necessary
components. Global semiconductor and component
shortages are also weighing on Huawei’s
smartphone business.

There were hopes in China that Joe Biden, who took
over as US president from Donald Trump in January,
would ease off his predecessor’s hardline
approach to China trade, including in regard to
semiconductors and related equipment. But it now
appears that the new administration will maintain
Trump’s combative stance.

Gina Raimondo, the US commerce department
secretary nominee, said in early February that she
saw no reason to remove blacklisted companies from
the department’s Entity List because most were
included on it for national security or foreign
policy reasons.

Source - FT, UK

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