Sanctions likely to cause Huawei to reduce smartphone production by up to 60%

The sanctions imposed by the US government are having a significant impact on Huawei’s role in the smartphone market. After transforming its intermediate cell phone brand, Honor, into an independent company, the manufacturer dramatically reduced their smartphone sales forecast this year. According to Slashgear, citing the Japanese newspaper Nikkei, the company informed its suppliers that they should expect a reduction of up to 60% in component requests this year. In contrast to the 189 million devices that the company delivered in 2020, this year it hopes to produce only between 70 to 80 million units.

Not only the quantity, but also the type of components acquired was quite affected by the sanctions. Nikkei sources cite that Huawei is asking only components for 4G smartphones, since the exception to the embargo that allows you to buy Qualcomm modems does not cover 5G modems.

Even without taking these sanctions into account, the future of Huawei is still uncertain. After the allegations that this company acts as a spying arm of the Chinese Communist Party, the government of former U.S. President Donald Trump has lobbyed against the entry of the Chinese company into the 5G market of several countries. However, now that Trump’s administration is no longer in power, some think that America’s previous position has lost some of its steam. The cost of replacing all of Huawei’s equipment, which is now very widespread globally, is also much higher than expected.

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