What They Say
Nikkei reports that Huawei has advised its suppliers that it expects its component orders to fall by more than 60% in the face of US sanctions. It expects to make 70-80 million smartphones in 2021, down from 189 million in 2020. Even that number may be optimistic, the paper reports, based on comments from suppliers because Huawei is limited to 4G devices.
The firm said that it is not considering selling its smartphone business at this time.
What We Think
This aspect of Trumpism seems to have survived the departure of the key player in the move to protectionism. The US has a long history of protectionism. The danger is that blocking access to US technology and that could have the effect of boosting Chinese technology development to ‘fill the gap’. There is a danger that such development might eventually make the US technology less essential. At the moment, that doesn’t seem a danger, but then a few years ago it might have been hard to imagine Intel no longer being the leader in driving the leading edge in chip making. (BR)
