Orders Reduced by 20% Due to COVID-19 Lockdowns Top Chinese handset makers Vivo, Xiaomi, and Oppo have cut their orders to suppliers by about 20% from previous plans due to local coronavirus-induced lockdowns. Reduced orders to smartphone OEM suppliers are also due to dwindling consumer trust and badly damaged supply chains, according to reports in the media.
According to a story published in Nikkei Asia quoting sources, Xiaomi has told suppliers that it will drop its full-year prediction to about 160 million to 180 million units from its earlier aim of 200 million. Vivo and Oppo, Xiaomi’s rivals and other Chinese handset makers, have also cut orders by approximately 20% for this quarter and next.
Orders Reduced by 20% Due To COVID-19 Lockdowns
Vivo has even informed some of its suppliers that it will not be upgrading certain key parts used in some mid range smartphone models this year due to rising inflation and decreasing demand. The source state this decision was made as a cost cutting measure in response to rising inflation rates and declining demand.
Here’s Why
According to a leading Chinese chipmaker, demand for smartphones and PCs or laptops has fallen “like a rock,” with the current global crisis and COVID-19 lockdowns potentially wiping out 200 million units by 2022, estimates China’s Semiconductor Manufacturing International Corporation (SMIC).
According to the SMIC lockdown will result in the reduction of 200 million smartphone unit this year. As reported by South China Morning Post SMIC predicted a dim future for consumer electronics consumption seeing no signs of improvement anytime soon. This quarter production could be reduced by 5% due to Shanghai lockdown.
In April China semiconductor output declined 12.1% to 25.9 billion unit its lowest level since December 2020. Many of China top firm have been paralysed due to supply chain disruptions and logistics issues; Shanghai currently plans to reopen on June 1 and resume normal operations.
Makers opinion
- According to the Chinese smartphone manufacturer, they are now only aiming for 160 million to 180 million orders.
- Since Xiaomi was able to provide more than 191 million devices in 2021, this is an 11 million to 31 million shipping gap.
- Vivo and Oppo, on the other hand, stated they had modified their unit order goals. They did not, however, confirm the revised figures for their anticipated purchases.
- Aside from lower smartphone orders, Vivo also stated that crucial components of some midrange smartphones will not be updated. As the rate of inflation rises, the tech firm argued that this is necessary to save costs.
- “The majority of the slowdowns are now coming from China, while demand in the United States, Western Europe, Latin America, and Southeast Asia appears to be fine,” said Jeff Pu, an experienced analyst at Haitong International Securities.
- While some of the main Chinese smartphone manufacturers are experiencing problems, others, such as Samsung, are witnessing growth.
- Honor, a fast-growing Chinese smartphone manufacturer, appears to be having no problems, as it maintains an 80-million-order target for 2022.
