When you move against an opponent, they should always be significantly weaker than you are. This is the basis of Sun Tzu’s teachings. The US government might have heeded such millennia-old advice when it decided to put Huawei Technologies on its Entity List back in May. Now, the Shenzhen-based technology giant has given a demonstration of how the Art of War works in business.
The world’s second-largest OEM of electronics, Flextronics, is being cut completely from Huawei’s supply chain, reports Yicai Global. This will result in more than one third of the US-based firm’s revenues instantly disappearing. According to Flex’s quarterly financial report, Huawei accounted for around US$2.5 billion of Flex’s total revenue of about $6.2 billion.
Flex’s crime? Withholding Huawei materials once the company began to cut orders, following the US government’s action against it in May.
Hon Hai Precision Industry – better known as Foxconn – and BYD Electronics are the two biggest beneficiaries, seeing their orders skyrocket in May and June. Both are based in Shenzhen. BYD Electronics, which is the main supplier of the Huawei P and Mate series, will see its orders from Huawei increase by 50% to 60% this year, Guosen Securities (Hong Kong) predicted.
In addition, Hangzhou Longqi Technology and Guangdong province-based DBG Technology have also assumed a portion of Huawei’s original equipment manufacturer work.