TOKYO – Huawei Technologies has informed its suppliers that its smartphone component orders will fall more than 60% this year, Nikkei has learned, while sanctions the US continues to bite.
Huawei has informed suppliers that they plan to order enough parts 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 released by Huawei last year.
The company’s component orders have been restricted to those for 4G models as the U.S. government is not allowed to import parts for 5G models. Some suppliers said the figure could drop to nearly 50 million units.
The Chinese tech giant last year fell to No. 3 in the global smartphone industry, behind Samsung Electronics and Apple, according to research firm IDC. Huawei is likely to lose more ground this year amid U.S. export restrictions.
Huawei declined to answer Nikkei’s questions about the case.
Huawei in November sold its Honor budget brand to a consortium of more than 30 Chinese companies in an effort to help Honor gain access to emergency parts and parts subject to U.S. restrictions.
Honor says it has established business relationships with major 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 Huawei suppliers have received permission from the U.S. Department of Commerce to ship parts, the company still doesn’t have access to key parts for 5G models.
Huawei was ahead of Apple and other smartphone makers in delivering 5G models. © Reuters
There have been news reports that Huawei may sell its mobile phone business completely. Asked about this, Huawei Technologies CEO Ren Zhengfei told a media group that he would “never” take that route. But according to an agency of one provider, Huawei was unable to get the necessary parts.
Global semiconductor shortages and parts shortages are also stressing Huawei’s smartphone industry.
There were hopes in China that U.S. President Joe Biden, who took over from Donald Trump last month, would downplay his ancestor’s harsh approach to Chinese trade, including semiconductors and related equipment. But it now appears that the new administration will maintain Trump’s controversial stance.
Earlier this month, Gina Raimondo, a secretary of the U.S. Department of Commerce, said she sees no reason at the moment to remove listed companies from the department’s Entry List because the majority- some are introduced for national security or foreign policy purposes.
Further statement by Lauly Li and Cheng Ting-Fang in Taipei.