Huawei asks Foxconn to cut down on phone production following US ban: Report

By Digit NewsDesk | Published on 02 Jun 2019
Huawei asks Foxconn to cut down on phone production following US ban: Report
HIGHLIGHTS

Huawei has reportedly asked Foxconn to stop “several” lines of production in response to the US government’s ban on US companies to do business with Huawei.

Huawei could come into a staggering halt in its ambition to become the world’s largest smartphone brand.

Huawei and its subsidiares are presently placed on a trade blacklist that restricts Huawei from buying products and services from US companies without the country’s approval.

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Huawei’s US ban might stretch for a long time and the Chinese smartphone giant is now scaling back its production according to a report by South China Morning Post. Huawei has reportedly asked Foxconn to stop “several” lines of production in response to the US government’s ban on US companies to do business with Huawei. The world’s second largest smartphone manufacturer was accused of installing backdoors in their devices to allow Chinese officials to spy on US citizens.

The report doesn’t mention whether the halt in production is long term or shot-term, but it comes just months after Foxconn went on a hiring spree to accommodate growing demands for Huawei phones.

If the report is indeed true, Huawei could come into a staggering halt in its ambition to become the world’s largest smartphone brand. The company is anyway in a tight spot after both Google and ARM announced they will be cutting ties with the company. Without Google’s services, Hauwei might be unable to ship Android phones in markets outside China. Huawei’s semiconductor division is also expected to hurt badly since it relies on ARM’s micro architecture licenses to design its HiSilicon Kirin chipsets.

The report states that Huawei is now closely observing and evaluating the situation, according to Zhao Ming, the president of Honor, a Huawei sub-brand at a media briefing in Shanghai, China.

“As the new situation has emerged, it is too early to say whether we are able to achieve the goal,” Zhao said when asked about Huawei’s plans to overtake Samsung in 2019.

Huawei and its subsidiares are presently placed on a trade blacklist that restricts Huawei from buying products and services from US companies without the country’s approval. After the announcement of the ban, US giants like Intel, Qualcomm, Broadcomm, and Google have reportedly told their employees not to supply products and services to Huawei anymore, which is expected to seriously cripple Huawei’s growth in the smartphone market.

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