Smartphone production in China has risen, perhaps not for long

Despite the ongoing COVID-19 pandemic, the demand for smartphones in China has tripled compared to February last year. According to Reuters, the number of sent smartphones increased by 236.6% compared to February 2020. In specific figures published by the state-funded think-tank of the Chinese Academy of Information and Communications, it is 21.3 million units in total.

In February 2020, the production of smartphones in China was 6.3 million units, and even such a large number was not even in February 2019, when it was only 14.9 million. Chinese smartphone production has been plagued by a pandemic and associated production restrictions and lack of interest from buyers. According to the latest data, it therefore appears that production in China has returned to pre-pandemic times.

Smartphone production is not just suffering because of a pandemic

However, there are still a few problems – the lack of chips, unexpected production outages, the trade war between America and China and possible errors in forecasting demand. The biggest of them are the lack of chips and the mentioned trade war. Due to the lack of chips, it is a problem to get hardware from several industries (consoles, graphics cards, processors). The trade war is hampering investment in the development of smartphones (Huawei), but also in intelligent cars.

Over time, this may also be reflected in the prices and availability of smartphones in our market. As early as the end of February, the director of Xiaomi wrote about the status of the lack of chips. At the same time (not only) Xiaomi strengthened its production capacity so that they could sell more equipment and gain the largest possible market share from the updating Huawei. According to analysts, this is also one of the reasons for the lack of chips.