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Huawei cuts phone production by more than half in 2021


Huawei has notified its suppliers that orders for its smartphone components will drop by more than 60 percent this year as the impact of U.S. sanctions continues, according to a report from the Nikkei ASEAN Review.

Huawei told suppliers that it plans to order enough components for between 70 million and 80 million smartphones this year.

This represents a 60 percent drop from the 189 million smartphones the company shipped last year, a significant decrease from the 240 million sold in 2019.

The company's component orders were limited to 4G models because they lacked u.S. government permission to import components for 5G models, and some suppliers indicated that the figure could be reduced to nearly 50 million units.

Last year, the beleaguered Chinese tech giant fell to third in the global smartphone industry, behind Samsung and Apple, and is likely to lose more of its share this year amid U.S. export restrictions.

In November 2020, Huawei sold its Honor brand to a consortium of more than 30 Chinese companies in an effort to help Honer regain access to u.S.-restricted components and key parts.

Honer says it has re-established business relationships with major suppliers, including AMD, Intel, MediaTech, Micron, Microsoft, Qualcomm, Samsung, Sony, and SK Hynix.

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

There were news reports that the Chinese company might sell its mobile phone business altogether, and in response to a question about it, the company's founder, Ren Zhengfei, told a media outlet that he would never go down that path.

An executive at a supplier explained that Huawei was unable to purchase the necessary components, and the global shortage of semiconductors and components also affects the Chinese company's smartphone business.

There were Chinese hopes that U.S. President Joe Biden, who succeeded Donald Trump last month, would soften his predecessor's hardline approach to trade with China, including on semiconductors and related equipment.

The new administration now seems to be moving to maintain Trump's belliwaris, said Gina Raimondo, a candidate for Secretary of Commerce: She sees no reason to remove blacklisted companies from the department's list of entities because most of them are listed for national security or foreign policy reasons.