Huawei may halve its smartphone production this year

Huawei has been in a tight spot ever since it was placed on the US Commerce Department’s Entity List in 2019. Although the company has made several efforts to survive against all odds, things have come to the point that it has had to sell some of its assets to stay afloat. For instance, the company sold its budget-friendly sub-brand Honor to a consortium of agents and dealers late last year, and it’s reportedly in early-stage talks to sell its Mate and P series as brands. On top of that, a recent report suggests that the company may also halve its smartphone production this year to keep costs low.

According to Nikkie Asia, Huawei has notified its suppliers that its smartphone component orders will be cut by more than 60% this year. The report cites sources from multiple suppliers, who have revealed that the company only plans to order components for 70 million to 80 million smartphones in 2021. That’s over a 60% decline from the 189 million Huawei smartphones shipped last year. A few suppliers indicate that the figure could potentially fall to nearly 50 million units.

The report further reveals that Huawei’s orders are limited to components for 4G smartphones, as it lacks the US government’s permission to import components for 5G devices. While Huawei hasn’t released an official statement on the matter, it’s quite clear that the US restrictions are taking a toll on its global smartphone business. Last year, the company lost its second spot on the list of top smartphone manufacturers to Samsung, and it may slip down even further this year. Unless the US government eases sanctions on the company this year, which seems unlikely at the moment, Huawei may be forced to exit the smartphone business altogether in the near future. We’ll update this post as soon as we learn of any further developments.

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