Visit comes after meetings with Samsung, SK Hynix
Chinese telecom equipment maker Huawei visited South Korea last week to meet with parts suppliers to enlist their support, according to sources close to the matter on June 4.
“Huawei admitted it may have to cut production, but asked for steady supplies even if that’s the case,” said one of the sources on the condition of anonymity.
In a separate meeting with Samsung Electronics, SK hynix and other larger tech companies on May 23-24, the firm had already mentioned predicted that it may be forced to cut back on shipment due to the latest sanctions from the US.
“The executives predicted that the firm’s mid to low-tier phones will be hit the hardest, while its flagship phones won’t be affected too much.
Huawei is the world’s No.2 smartphone maker and No.1 telecom supplier. Its flagship lineup includes the Huawei P30, the P30 Pro, the Mate20 and Mate20 Pro.
Considering that the South China Morning Post reported on June 3 that Foxconn’s supply lines for Huawei smartphones have been partially halted, Huawei appears to have notified the Korean parts makers in advance. Most of these local suppliers supply to Huawei via Chinese companies such as O-Film and BOE.
Huawei’s plans to become the largest smartphone in the world by 2020 have been put on hold due to President Donald Trump’s recent measures to place it on its Entity List amidst a trade row between Washington and Beijing. Companies on this list have a hard time surviving because other firms are discouraged from doing business with them. Several American companies including Google have already said they would do as such.
Further, Taiwanese market research firm Fubon Research has cut its estimates for Huawei smartphones this year to 200 million, down from its previous forecast of 258 million.
Linda Sui, researcher at Strategy Analytics, said Huawei phone shipments are apt to fall by up to 23% next year. “Nevertheless, sales within China may be able to keep Huawei afloat,” Sui added.