Nikkei: Huawei reduced its smartphone production by 60% this year

According to sources from many suppliers, Huawei announced plans to order enough components for 70 to 80 million smartphones this year. It’s more than 60% down from Huawei’s 189 million smartphone production in 2020.

In addition, the order is limited to 4G model because the US does not allow Huawei to import components for the 5G model. Some suppliers even claim that output could be reduced to nearly 50 million units.

The Chinese tech giant fell to third place in the global smartphone market last year, behind Samsung and Apple, according to IDC. Huawei is likely to fall even deeper in 2021 due to the US ban.

In November 2020, Huawei sold its low-end brand Honor to an alliance of more than 30 Chinese companies to save Honor from sanctions and gain access to critical parts supplies. This approach has worked when Honor announced partnerships with major suppliers such as AMD, Intel, MediaTek, Micron Technology, Microsoft, Qualcomm, Samsung, SK Hynix and Sony. It launched the V40 5G smartphone in China last month.

Although some Huawei suppliers have obtained a permit from the US Department of Commerce to sell components, the company has yet to be able to purchase core components in 5G models. There are rumors that Huawei must sell high-end smartphones P and Mate. However, the founder Nham Chinh Phi affirmed never to follow this path. But, according to Nikkei, a leader of a supplier said Huawei could not buy all the necessary components.

The shortage of components and semiconductors worldwide has also put further pressure on Huawei’s smartphone segment. It is hoped that US President Joe Biden can adopt a softer stance on China than his predecessor Donald Trump. Even so, it seems that the new administration still maintains Trump’s tough stance.

Earlier this month, Gina Raimondo, a candidate for the US Secretary of Commerce, said she now sees no reason to remove the blacklisted companies of the ministry as most of them were included because related to national security or foreign policy.