Huawei Is Furling Smartphone Production as Sales Drop Dramatically

Written by Bill Toulas
Last updated September 23, 2021

Huawei has decided to aim for half of the volumes they produced last year, as smartphone sales are expected to drop by about 60% for them. This estimation is based on the current market conditions and the fact that the Biden administration has not agreed to speak with CEO Ren Zhengfei and discuss the potential retraction of the Trump-era bans. It is an unfortunate development for one of Android’s most iconic and innovative players, but they’ll have to go through it in whatever way possible.

Reducing the smartphone output is a sane response and also inevitable, as Huawei cannot produce the same volumes without the chip and part vendors' support. This creates a vacuum for Apple to exploit, which is already reporting amazing sales growth in China. It’s very hard for Huawei to move forward without Google services, and forking (more like copying) the Android 10 is not enough to convince people that they have anything running on the OS aspect.

Obviously, Huawei is forced to do other stuff besides 5G networks and smartphones, and the Chinese tech giant is already rolling up its sleeves in AI-based pig farming solutions and also coal mining. Also, there’s evidence that Huawei will move very aggressively on the laptop, tablet, computer, and TV space. Finally, smart vehicle solutions, cloud computing services, and even the development of a smart car may be introduced in Huawei’s R&D portfolio soon, diversifying the company even more.

In the meantime, vendors are feeling the effects of Huawei’s downfall, as the Chinese firm was the world’s top smartphone seller in Q2 2020. Naturally, they placed voluminous orders on suppliers like Qualcomm and TSMC, who have now lost that client. TSMC, though, doesn’t appear to be dealing with any business trouble due to these latest developments, as their 5nm chips are selling like hotcakes. Apple, Qualcomm, MediaTek, and AMD are collectively demanding even more volumes than what TSMC can currently produce, forcing the chipmaker to raise its capacity from 65,000 to 120,000 wafers per month soon.

Back to Huawei, the company is still struggling to convince the Canadians to let its CFO go, but the extradition to the US appears to be a done thing. On smartphone news, the company teased a new foldable device, the Mate X2, more as a demonstration of their capabilities and technical excellence rather than as a market sensation contender.

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