Huawei vice-chairman Guo Ping told staff that the company will not go out of the smartphone business despite the supply chain issues that have kept the company from performing and in previous years. Ping said that the company will push manufacturing in the domestic chip manufacturing sector to return to its original position.
Citing comments made in Huawei's internal Q&A session, Ping emphasized that the company plans to continue developing device technology while supporting local partners while increasing semiconductor production capabilities.
After Chinese companies can meet the requirements of semiconductor production, Ping, who is one of the company's rotating chairman, hopes Huawei can return to the "smartphone throne."
As reported by CNBC, Ping said that Huawei had been “stuck” in designing but lacked the capability to manufacture advanced chips. As a result, as a result of the restrictions imposed by the US government since 2019, Huawei's share in the global smartphone market and revenue have fallen sharply. The embargo, issued during President Donald Trump's administration, severely limited Huawei's ability to source high-end components from third parties to produce its handsets.
Unit shipments were also hampered by sales of the Honor sub-brand, which is outside the boundaries of trade as an independent business. Huawei said in November 2020 that it had sold Honor to a consortium of more than 30 agents and dealers. Honor's sales of 100 billion yuan ($15.2 billion) aim to keep the brand alive.
Huawei is currently the subject of US trade restrictions for security reasons it claims are mostly related to its network business. The company has repeatedly denied all security allegations made by the US and its allies because there is no evidence to show.
With the restrictions that have not been lifted even though the US has changed leadership, the turmoil that has hit Huawei will not end. Instead of asking for sanctions to be relaxed, Huawei is encouraging chip manufacturing in the home market.
The move to produce its own chips is in line with Huawei founder and CEO Ren Zhengfei. Previously, as reported by Reuters, Ren had asked his employees to immediately change the direction of the company's business to become a software giant. This step was taken by the Chinese company to survive the impact of sanctions imposed by the White House.
In an internal memo issued on May 28, 2021, Ren said that Huawei should focus on software because the industry is outside US control, so they will have more freedom and autonomy.
Huawei is currently developing various software projects, including MindSpore, an AI cloud platform, and the HarmonyOS operating system for various hardware devices. By becoming a new force in the software industry, Huawei will compete in key markets other than the US.
"After we dominate Europe, Asia Pacific, and Africa, if US standards don't match ours, and we can't enter the US, the US can't enter our territory," Ren concluded.
