After suspending part of the production in May due to the U.S. “Entity List” restriction, Flex Ltd, Huawei’s largest smartphone assembler, has halted all production lines in its Changsha factory based in central China’s Hunan Province, according to Caixin’s report last Friday.
An exclusive report from iFeng tech revealed that Huawei ruled Flex out of their supply chain after the company realized production requirements cannot be met.
The Singapore-based electronic manufacturing service giant confirmed in May that they were asked to suspend all global cooperation with Huawei, including productions in Chinese factories and product deliveries, in order to comply with the Washington rules.
They resumed shipments for the majority of products in the later months, but their partnership failed to continue after the company repeatedly asked Huawei to make a promise on some of its conditions, the iFeng report said on Wednesday.
Flex’s business in the Changsha factory has been partly taken over by BYD electronics, the report mentions. Best known for the electronic vehicles business, BYD is also a major supplier of Huawei's Mate20 RS camera assembly services and plastic parts for Mate20 and Mate20 Pro metal frames.
Founded in 1969, Flex is the world's second largest contract manufacturer after Foxconn by revenue, and Huawei’s largest phone assembler. It employs nearly 200,000 people in more than 30 countries and has over 30 factories in China.
According to Reuters' report, Huawei contributes nearly 2.5 billion yuan to Flex’s revenue so losing the contract with the telecom giant will be a heavy blow for the American company.