Huawei, faced with US sanctions, likely to cut smartphone production by 60% this year

Input 2021.02.20 12:07

It has been observed that Huawei, a large Chinese telecommunications equipment and smartphone manufacturer, faced with US sanctions, will reduce smartphone production this year by more than 60% compared to the previous year.

Japan’s Nikkei reported on the 18th, quoting multiple sources that supply smartphone parts to Huawei, “Huawei has notified smartphone component suppliers that it will’reduce orders by more than 60% this year’.”

Accordingly, Nikkei predicted that Huawei’s smartphone shipments this year will be limited to 70 million to 80 million units. This is a 60% decrease from Huawei’s last year’s smartphone shipments of 189 million units. Huawei did not comment on the Nikkei newspaper report.

Huawei is seriously hitting smartphone production due to US sanctions. According to Canalis, a global market research firm, Huawei’s smartphone shipments last year decreased by 22% compared to 2019. Nicole Feng, vice president of mobility at Canalis, said that if Huawei’s shipments declined by 60% this year would be better than market expectations. This means that if the newly inaugurated US President Joe Biden continues to sanction, Huawei’s smart loan shipments could be further reduced.

According to research firm IDC, Huawei’s global smartphone market share last year was Samsung Electronics (005930), Fell to third place in the industry after Apple. Huawei is likely to lose more base this year due to US export restrictions.

Former U.S. President Donald Trump has initiated regulations starting in May 2019, requiring domestic companies to obtain permission to supply parts to Huawei for security reasons. In addition, from May last year, regulations on Huawei have been strengthened by requiring foreign companies that produce parts using U.S. equipment to obtain permission from the U.S. government as well as U.S. companies when supplying parts to Huawei.