Huawei is preparing for difficult days. The Chinese company recently reported to its suppliers that it will produce much less phones this year than last year.
Huawei Technologies announced to its suppliers that orders for smartphone components will be reduced by more than 60 percent this year, due to US sanctions that have been in effect for a year and a half.
Huawei announced to its suppliers that it plans to order parts for 70-80 million smartphones this year, according to the report of Nikkei Asia, a reliable news outlet. This number reflects a reduction of over 60 percent compared to the 189 million smartphones Huawei released last year.
The company managed to survive thanks to the microchip and component stocks it accumulated on time. However, in August, Richard Yu, head of the consumer electronics division of Huawei Consumer Group, warned that the group was facing a chip shortage. Because Huawei develops processors for its smartphones under the name of Kirin, which is its own brand, but they depend on American technologies in their production.
Last year, the Chinese tech giant fell to third place in the global smartphone industry after Samsung Electronics and Apple, according to research firm IDC. Experts predict that Huawei will lose more positions this year due to US export restrictions.
Huawei’s hope is the new US President
To remind you: In November, Huawei sold its budget brand Honor to a consortium of more than 30 Chinese companies to help regain access to critical components and parts that fell under US restrictions. It is stated that Honor has re-established business relationships with key vendors such as AMD, Intel, MediaTek, Micron Technology, Microsoft, Qualcomm, Samsung, SK Hynix and Sony.
Although some Huawei suppliers have received permission from the US Department of Commerce to supply spare parts, the company still does not have access to the main components of 5G models. Earlier this month, Huawei’s founder and CEO Ren Zhengfei called for the reset of relations between the United States and the Chinese tech giant. Speaking to the international media in China, Zhengfei expressed his readiness to meet with the new US President Joe Biden and said he hoped “open policy” from the new administration.