Huawei component orders down 60%, signals smartphone production drop

22 February 2021 | Melanie Mingas

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Huawei has told its suppliers that it plans to order enough components for "70 million to 80 million smartphones this year", marking a 60% decline on the 189 million smartphones it shipped last year.

The company cannot import components for 5G models due to US sanctions – although some suppliers have obtained permissions to work around this – so component orders have been limited to those for 4G models.

Reporting the figures on Friday, Nikkei said the result will likely be a significant drop in smartphone production as US sanctions impact the company. Some of the suppliers that spoke to Nikkei indicated the figure could be lowered further to nearly 50 million units.

Huawei did not respond to requests for comment.

Huawei confirmed it would sell Honor in November, in a deal valued at US$15.2 billion. The government of Shenzhen and handset distributor Digital China were reported to be in line to buy.

Honor said 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.

In the last few weeks, Huawei Technologies CEO Ren Zhengfei has been asked if a sale of the larger smartphone business could be on the cards, but he said he would "never" take that path. A potential foray into gaming and consoles have also made headlines, with Huawei's first gaming laptop reported to be launched later this year.

Meanwhile, to secure their own parts supplies, specifically chips, Xiaomi and Oppo have become shareholders in Jiangsu Changjing Electronics Technology Co, a semiconductor maker based in East China's Jiangsu Province.