Huawei to slash smartphone production by 60% in 2021

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

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

The embattled Chinese tech giant last year fell to No. 3 in the global smartphone industry, behind Samsung Electronics and Apple, according to research company IDC. Huawei is likely to lose further ground this year amid the U.S. export restrictions.

Huawei declined to answer Nikkei inquiries regarding the matter.

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 U.S. 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 the V40 5G smartphone in China last month.

While some of Huawei’s suppliers have obtained permission from the U.S. Department of Commerce to ship parts, the company still lacks access to core components for 5G models.

Earlier this month United States President Joe Biden’s nominee for Commerce secretary, Gina Raimondo, said she has seen no reason to lift the trade restrictions off Huawei.

Huawei is projected to tumble from third place in 2020 to seventh place in 2021, according to analyst firm TrendForce. The top six smartphone makers for 2021, in order, will be Samsung, Apple, Xiaomi, OPPO, Vivo, and Transsion.

Smartphone production dipped 11 percent to reach 1.25 billion units  in 2020. Samsung, Apple, Huawei, Xiaomi, OPPO, and Vivo were the top six smartphone brands ranked in terms of production volume for 2020.
Global smartphone production forecast for 2021
An IDC report in January said Huawei is still facing heavy inventories to clear in China and the pricing of its Mate 30 series has also been a limiting factor. Channel players in China are still willing to work with Huawei as it could provide a better brand value locally than its key competitors.

Things will continue to look challenging for Huawei given that the trade war is still not yet resolved while new uncertainty raised around the Wuhan coronavirus could potentially have adverse effects on not just Huawei, but all players reliant on the China smartphone supply chain,” Melissa Chau, associate research director with IDC’s Worldwide Mobile Device Trackers, said in January.

Though Huawei launched the Mate 30 series in some international markets, such as Malaysia and Singapore, the lack of Google Mobile Services still impacted its performance. huawei smartphone production


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