Foxconn Cuts Back Huawei Production Amid US Ban

Posted: Jun 2 2019, 6:02am CDT | by , Updated: Jun 2 2019, 6:27am CDT , in Mobile Phones


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Foxconn cuts back Huawei production amid US ban

The troubled Chinese smartphone company is reportedly reassessing its goal to beat Samsung and to become the world's top-selling smartphone seller by 2020 as a result of the United States' ban.

Taiwanese electronics manufacturer Hon Hai Precision Industry, which does business as Foxconn Technology Group, has scaled down production of Huawei phones in the wake of the United States' decision to ban products from the Chinese smartphone company, the South China Morning Post reported, citing people familiar with the matter.

Huawei has reportedly reduced orders for new phones from Foxconn, prompting the supplier to stop a number of production lines for Huawei phones in recent days.

The move comes as U.S. President Donald Trump on May 15 signed an executive order banning Huawei from the U.S. market and preventing American companies from doing business with the troubled Shenzhen-based company.

The decision has triggered companies to suspend their contracts with the company, including Google, which blocked Huawei's access to Android updates. Other tech companies, such as chip makers Intel, Qualcomm, Xilinx, and Broadcom were also reported to have halted supplying parts to Huawei until further notice.

However, just a day after Google cut off Huawei from accessing Android updates, the U.S. Department of Commerce granted a slight reprieve to Huawei, allowing the company to retain its existing networks and release updates to Huawei devices.

Apart from the negative implication of the ban to Huawei, the executive order also comes as a blow to Foxconn, which reportedly went on a massive recruitment drive in early 2019 to ramp up production of Huawei phones following a surge in the smartphone company's sales. In the first quarter of 2019, Huawei's share of global smartphone shipments reportedly climbed to 15.7%, while the market shares of key players Samsung and Apple plunged to 19.2% and 11.9%, respectively.

Meanwhile, Zhao Ming, president of Huawei smartphone brand Honor, reportedly said that Huawei is reevaluating its goal to topple Samsung Electronics and to become the world's top-selling smartphone seller by 2020 as a result of the U.S. ban.

"As the new situation has emerged, it is too early to say whether we are able to achieve the goal," Zhao reportedly said at a media briefing in Shanghai on May 31 to launch Honor's new flagship phone.

The newspaper said Zhao declined to comment on whether Huawei's woes in the U.S. have had an impact on Honor's businesses in overseas markets. The executive also said that he was not aware of Foxconn's move to cut production, the South China Morning Post reported.

To date, Huawei has been banned from either selling its products or from rolling out its 5G network in a number of countries, including Australia, New Zealand, Japan, Taiwan, the U.S and U.K., Germany, France, according to data collected by database firm Statista.

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<a href="/latest_stories/all/all/81" rel="author">Mandy Jean</a>
Mandy covers the latest news in Tech and Business.




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