Report: Huawei planning to produce far fewer phones in 2021

Huawei surprised the tech world when it emerged as the number one smartphone brand in Q2 2020, passing Samsung to take the crown. It’s widely believed that the manufacturer was able to capitalize on a COVID-19 recovery in its home market of China while Samsung’s strongholds of Europe and North America were being hit hard by the pandemic.

Unfortunately for Huawei, Korean outlet The Elec now reports that the brand is planning to produce far fewer smartphones in 2021. Huawei reportedly told its South Korean subcontractors that it plans to produce just 50 million units next year.

How does that compare to 2020 then? Well, it would be a 74% drop compared to its expected shipment of 190 million units this year. Furthermore, Huawei shipped over 55 million units in Q2 2020 alone. The Korean publication adds that the US ban is directly to blame for the apparent 2021 figure.

The effects of the US ban

Huawei has been adversely affected by US sanctions against the company, barring the firm from using Google services on its new devices while also barring the use of many US components. But Washington’s move to bar the likes of chipmaker TSMC from producing Huawei’s own Kirin chips means that the firm will have to rely on other chipmakers, stockpiles of existing processors, as well as chips from the likes of MediaTek.

Furthermore, the Chinese giant is set to rely on fellow Chinese company SMIC to produce some of its Kirin chips. However, it recently emerged that the US could take action against SMIC as well.

The move against Huawei could open the door for other players to expand, and The Elec‘s sources said that Samsung is aiming to be aggressive in Europe and India next year. The outlet says Samsung is taking advantage of the US action against Huawei and Sino-Indian tensions in targeting Europe and India respectively. More specifically, it’s reported that Samsung is aiming to ship 300 million smartphones next year.

Next: The Huawei ban explained — A complete timeline and everything you need to know