Huawei setting up smartphone plant in Brazil as restructure commences

Huawei setting up smartphone plant in Brazil as restructure commences

Huawei is looking to set up a new manufacturing plant in Brazil with an investment of $800 million.

Reuters reported that the Chinese vendor believes that demand for 5G equipment is set to surge in the South American market following its upcoming 5G spectrum auctions, which are scheduled for March next year.

The facility will reportedly focus primarily on manufacturing smartphones for distribution in Brazil and across the continent, complementing an existing Huawei factory in Sao Paulo. The investment forms a three-year strategy that will commence once next year’s auctions are concluded.

Huawei is not alone in its belief that demand will see a boost following the auction. Nokia’s Latin America CTO Wilson Cardoso last week predicted that Brazil’s 5G auction would be the largest in the world to date, and underlined his belief that 5G adoption in the continent is likely to be driven by industry.

The move to open an international smartphone facility may form part of a wider movement at the Chinese vendor, which has faced concerns from the US and other markets over the security of its equipment and its relationship to the Chinese government.

Bloomberg has now reported that Huawei’s founder and CEO Ren Zhengfei has planned to overhaul the business’s structure to overcome the supply chain issues that it faces. The vendor has been placed on a US blacklist that prevents it from importing components and software from the market.

In particular, Huawei is looking to reorganise its smartphone production. A memo attributed to Ren reportedly urged for a complete restructuring across the next three to five years. The document warned that the transition would be “painful” for Huawei’s consumer business but that the company could overcome the US blockade by becoming an “iron army”.

While the US has since relaxed some of the sanctions placed on Huawei, the vendor has been spurred into becoming self-reliant, recently announcing its in-house operating system HarmonyOS which is aimed as a replacement for Google’s Android. However, this may not be feasible in the short-term as developers will need longer to create an ecosystem around the OS.

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