TOKYO – Huawei Technologies has informed its suppliers that its orders for smartphone components will fall by more than 60% this year, Nikkei has learned, as US sanctions continue to be rife.
Huawei has informed suppliers that it plans to order enough components for 70 to 80 million smartphones this year, according to people from several suppliers. The range represents a drop of more than 60% from the 189 million smartphones Huawei shipped last year.
The company’s component orders have been limited to those for 4G models because it does not have permission from the U.S. government to import components for 5G models. Some vendors have indicated the figure could be lowered to nearly 50 million units.
Last year, the struggling Chinese tech giant fell to No. 3 in the global smartphone industry, behind Samsung Electronics and Apple, according to research firm IDC. Huawei will likely lose further ground this year due to US export restrictions.
Huawei declined to answer Nikkei’s questions on this matter.
Huawei sold its budget brand Honor in November to a consortium of more than 30 Chinese companies in an effort to help Honor regain access to critical components and parts subject to U.S. restrictions.
Honor claims to have strengthened business relationships with key vendors 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 obtained permission from the US Department of Commerce to ship parts, the company still does not have access to basic components for 5G models.
Huawei was ahead of Apple and other smartphone makers in delivering 5G models. © Reuters
There have been reports that Huawei may sell its entire mobile phone business. When asked about this, Huawei Technologies CEO Ren Zhengfei told a media outlet that he would “never” take this route. But according to an executive at a supplier, Huawei was unable to source the necessary components.
Global semiconductor and component shortages are also weighing on Huawei’s smartphone business.
It was hoped in China that US President Joe Biden, who took over from Donald Trump last month, would ease his predecessor’s sweeping approach to Chinese commerce, including semiconductors and related equipment. But now it looks like the new administration will maintain Trump’s combative stance.
US Department of Commerce secretary candidate Gina Raimondo said earlier this month that she currently sees no reason to remove blacklisted companies from the department’s entity list, as most were there. included for national security or foreign policy reasons.
Additional reports by Lauly Li and Cheng Ting-Fang in Taipei.
