Huawei is reportedly ramping down production for its smartphones

The United States government's decision to add Huawei to a blacklist that prevents US companies from selling the Chinese tech giant any hardware or services has had massive ramifications for the company's business.

The company had surpassed Apple as the second largest seller of smartphones back in 2017, and had its sights set on dethroning Samsung by 2020 to become the biggest smartphone maker in the world. In light of its recent difficulties, however, the tech giant is reportedly reassessing those goals. “As the new situation has emerged, it is too early to say whether we are able to achieve the goal,” said Zhao Ming, the president of Huawei's sub-brand Honor, in a recent interview.

Production lines dedicated to Huawei phones at Foxconn, the company which assembles smartphones for many of the world's top phone makers, have reportedly been shut down in recent days as Huawei has reduced its orders to the ODM. The report by The South China Morning Post does not clarify if these reductions in production are temporary continuances or a sign of larger cuts in production as the Chinese giant reels from the latest salvos aimed at it by the US government.

With Huawei's access to critical technologies such as the Android operating system or licenses to ARM's newest SoC designs cut off, it would make sense for the company to ramp down production while it works to make its contingencies, such as the homebrewed HongMeng OS, operational.

Huawei's market share in the smartphone market was still seeing gains in the first quarter of 2019, but if the company continues to be at the center of the trade dispute between China and the US for too much longer, the numbers may not be as kind to the company in the next quarter.

Source: South China Morning Post

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