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Xiaomi, OPPO reportedly stockpiling Japanese parts and increasing production significantly

Phate Zhang Oct 18, 2020 17:30 GMT+8

Xiaomi, OPPO reportedly stockpiling Japanese parts and increasing production significantly-CnTechPost

Japanese electronic parts makers received large stockpiling orders from Chinese handset makers such as Xiaomi, OPPO, and Vivo to fill the loss of orders from Huawei, according to Nikkei Asia.

Huawei's orders were suspended after US sanctions took effect on September 15. Still, a surge in demand from rivals such as Xiaomi, OPPO, and Vivo filled the gap, according to the report on Friday. Some customers are looking for Japanese technology, fearing that the US could extend the ban to other Chinese companies.

Total smartphone shipments are expected to fall for the fourth consecutive time in 2020, according to market researcher IDC. A 10 percent decrease to 1.2 billion units, due in part to Covid-19. However, some manufacturers have more aggressive production plans to fill Huawei's market share.

Apple recently announced to its suppliers that it plans to produce 220 million iPhones this year, 10 percent more than it previously expected. Xiaomi and OPPO are looking to seriously ramp up production in 2021, according to several of their suppliers, to reach a goal of 200 million phones each, which is more than half of what they will produce in 2020.

OPPO increases smartphone orders by up to 100 million units as Huawei's global expansion hits wall

Huawei is expected to produce about 190 million phones this year, 20 percent less than in 2019. While Huawei has stockpiles of spare parts to minimize the immediate impact of sanctions, these reserves can only go so far. The company is thought to have about six months' worth of parts, with production expected to fall from the first quarter of 2021.

TDK Corporation, a Japanese electronic parts maker, expects other companies to purchase more than Huawei's lost business. An employee of a major Japanese electronic parts maker said, "Orders at the end of September are already at a record high, and some manufacturers are planning to double their production plans for next year."

Chipmaker Renesas Electronics Corp. was asked by a Chinese customer to have a non-US engineer redesign a specific product at a factory outside the United States. Zuken, a supplier of circuit board design software, reports growing interest from companies in China and elsewhere in finding alternatives to US-made tools.

In addition, suppliers are distancing themselves from the US in order to continue doing business with Huawei. Sumitomo Electric Industries Ltd. has begun using Japanese-made equipment instead of some US equipment to test components for Huawei's base stations.

However, one supplier warned that this is a special one-time demand boost that may be adjusted in early 2021.

OPPO steps up chip ambition as US ban hits Huawei, report says

#Huawei#Oppo#Vivo#Xiaomi
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Phate Zhang
Phate is the founder of CnTechPost and the main author of the site. He has been reporting in Chinese and English since 2009, focusing on macroeconomics and capital markets. He is also a tech enthusiast, and it is his interest to follow tech industry developments.
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