With the US crack down hard on Huawei intensifying, the effects of the recent sanctions have started to show, with a DigiTimes report revealing that the Chinese tech giant has slowed down its production of smartphones.
Amidst the stricter regulations being placed upon Huawei, the company has had to slow down its pace of orders from its handset ODMs. For those unaware, the US has been successful in cutting chip supply to the Chinese vendor. After the company lost TSMC as its primary chip supplier, the US government also amended its regulations to further hamper its supply chain. Now, Huawei can’t source technology that has originated from America, without a special license being issued.
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Being a major player in the smartphone market, this means that the company stands to lose a lot of grounds in the market share. In other words, we can expect other companies to fill in the void created within the market. According to sources close to a certain Chinese handset ODM, the company is reducing its orders to better cope with the intensifying pressure from the US Government.
Since Huawei lost Google support on its Android smartphones, the company has faced a decline in its various overseas markets. This means that China is currently its largest and most important market. So, the slowed pace of smartphone output could noticeably hamper its smartphone sales in the region in 2020. We can also expect other Chinese OEMs like Xiaomi, Oppo, and Vivo to take advantage of the situation.
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