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Huawei Struggles to Meet Demand for Popular Mate 60 5G Smartphones
Updated: Jan 5
Huawei Technologies is facing a significant challenge as the demand for its popular Mate 60 Pro 5G smartphones surpasses the current production capacity.
Customers are experiencing wait times of up to three months for their orders to be fulfilled.
The Mate 60 Pro, equipped with an advanced made-in-China chip that defies US sanctions, has seen a surge in demand, leading to supply shortages.
The secrecy surrounding the chip used in the Mate 60 Pro, known as the Kirin 9000s processor, has further complicated the supply chain process for Huawei's partners. Typically, it takes 12 to 18 months to provision parts for a device before its launch. The lack of transparency regarding the chip has made it challenging for Huawei's supply chain partners to meet the demand effectively.
To address the issue, Huawei has introduced a subscription program for the Mate 60 Pro, promising a maximum wait time of 90 days for consumers who place their orders through the scheme on the official website. Each consumer is limited to purchasing only one unit, and orders will be shipped randomly within the 90-day timeframe.
Despite the supply challenges, the Mate 60 series has achieved impressive sales figures. Within eight weeks of its launch, it recorded 2.4 million units in domestic sales volume. The premium 5G Mate 60 Pro accounted for over 60% of the total shipments during that period. Huawei's return to the 5G smartphone market has been successful, but the supply shortages have limited daily sales.
Huawei's major suppliers, such as Foxconn Technology Group, have been increasing their recruitment of assembly line workers to meet the rising demand for the Mate 60 Pro. Foxconn is offering higher rates for workers assembling Huawei handsets at its Shenzhen plant compared to those assembling iPhones at its facility in Zhengzhou.
The chip maker Semiconductor Manufacturing International Corp (SMIC), which produces the Kirin 9000s chip, has reported good yields on its 7-nanometer line. Despite US government restrictions, SMIC's 7-nanometer process technology is comparable to that of Taiwan Semiconductor Manufacturing Co (TSMC). Analysts believe that the supply shortages are due to the high demand for Huawei's first 5G smartphones in over two years, rather than any deficiencies in SMIC's production capabilities.
The Mate 60 series has already surpassed the sales performance of the previous 4G Mate 50 series within eight weeks. Huawei's last 5G smartphone release was the Mate 40 series in October 2020, more than a year after the company was added to the US trade blacklist. Counterpoint, a research firm, forecasts that the total shipments of the Mate 60 series could reach 4 million units within four months of its launch.
Huawei is struggling to meet the growing demand for its Mate 60 Pro 5G smartphones.
The current production capacity cannot keep up with the demand, resulting in wait times of up to three months for customers.
The secrecy surrounding the advanced Kirin 9000s processor has complicated the supply chain process for Huawei's partners.
Source: SCMP