"'US Sanctions' Huawei Cuts Smartphone Parts Orders by 60% to Partners"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Joselgina] Chinese tech giant Huawei, blacklisted by the U.S. government, is set to drastically reduce its smartphone production this year as industry experts predicted. The company has informed its partners that it will cut smartphone component orders by more than 60%.

On the 19th, Nikkei Asia cited multiple Huawei partner sources reporting that "Huawei has notified its partners that it plans to order components sufficient to produce 70 to 80 million smartphones this year." This represents a reduction of over 60% compared to Huawei's global smartphone shipments last year, which were approximately 189 million units.

The component orders will be limited to LTE models. Nikkei Asia reported, "LTE model components do not require U.S. government approval for 5G component imports," adding, "Despite the inauguration of the Joe Biden administration, U.S. sanctions blocking Huawei's access to key smartphone components are unlikely to be eased." Some partners estimate that component orders could drop to as low as 50 million units. However, Huawei has declined to provide an official response on this matter.

According to market research firms IDC and Canalys, Huawei, which once dominated the global smartphone market, fell to third place last year. Hit hard by U.S. government sanctions, its global smartphone shipments, including the Honor brand, decreased by 22% year-on-year to 188.5 million units. In the fourth quarter, it slipped further to sixth place. This marks the first time in six years that Huawei has been excluded from the global top five manufacturers. Projections suggest it may fall to seventh place this year.

This situation also fuels ongoing rumors about the potential sale of Huawei's smartphone business. However, Huawei founder Ren Zhengfei recently emphasized that "a terminal device is not just a simple phone but a device connecting people and things," and firmly stated, "We will never sell it." Huawei plans to unveil its foldable smartphone 'Mate X2' on the opening day of MWC Shanghai 2021, scheduled for the 22nd. Ren also expressed at a 5G project event in China that he "looks forward to a call with President Biden."

Nikkei Asia noted, "Although Ren Zhengfei denied the sale rumors, Huawei is struggling to procure necessary components," adding, "In China, there was hope that President Biden would soften the Trump administration's tough trade stance toward China, but the new administration appears to maintain the combative position of its predecessor."

This content was produced with the assistance of AI translation services.