Huawei Pauses Production of Smartphones Amid US Blacklisting

A bicyclist rides past a Fed Ex Corp. vehicle parked in the Midtown neighborhood of New York

A bicyclist rides past a Fed Ex Corp. vehicle parked in the Midtown neighborhood of New York. , John Taggart Bloomberg

The anonymous sources said that after as Huawei received less orders for its smartphones, Foxconn had to reduce production in China accordingly.

It's quite a move, if you consider that Foxconn was actually recruiting massively at the beginning of the year due to Huawei's growing sales: the company saw a huge growth in shipments that went from 10.5 in the first quarter of 2018 to 15.7 in the first quarter of 2019.

Huawei sells about half its smartphones in China, according to Canalys. Companies that sell 25 or more percent USA -origin tech would come under the ban.

Media reports have pointed out that Huawei's smartphone production has been cut down.

The Chinese government's move to announce its own blacklist is causing concerns among global ICT companies as a lot of them have ties with Chinese companies in terms of technology development, parts supply, and sales. According to witnesses, Huawei arranged about a hundred trucks to pick up raw materials from Flex Zhuhai on May 20, so that Huawei could use the materials to manufacture phones itself.

Huawei is the top network equipment provider worldwide and the second biggest smartphone developer.

Huawei's goal of becoming the world's top-selling smartphone maker has been dealt a significant blow by trade and supply bans that have reportedly forced the Chinese company to scale back production.

The Trump administration may have found the most potent weapon yet in its campaign against Huawei Technologies Co.: the European consumer. Consumers are holding onto phones for longer.

To allow time for software updates in existing Huawei products, the U.S. Commerce Department granted the company a temporary exemption for 90 days. The blacklist means that US companies are not allowed to produce and sell Huawei parts, withdrawing a large support network for the Chinese company.

Consumers' demand for Huawei devices has "dropped off a cliff", Ben Stanton, a United Kingdom -based analyst at market research firm Canalys, told Bloomberg on June 4. Its key hardware and software suppliers including Googles Android service, Qualcomm, ARM, and Microsoft have since withdrew support for future Huawei device.

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