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Huawei looks to capitalise on 5G demand with new Brazil factory

Huawei P30 Pro
(Image credit: Future)

Huawei is to invest $800 million in a new factory in Brazil as it doubles down on efforts in Latin America to compensate for being excluded from the US market.

The company has had a presence in the country for more than 20 years and has an existing facility in Sao Paolo state that produces telecommunications equipment for mobile operators.

According to Reuters, the governor of Sao Paolo, confirmed plans for a new plant during a visit to China. The exact location of the site is still to be decided, but it is thought that 1,000 additional people will be employed.

Huawei Brazil

It is thought the any new factory will manufacture smartphones for both the local and international markets.

“Depending on the performance of the smartphone operation in the local market, Huawei will consider building a plant in Sao Paulo in the near future,” a Huwei spokesperson told the news agency.

Huawei is the world’s second largest smartphone manufacturer but its ambitions to become number one have been derailed by hostility from the US government. The company has effectively been excluded from America for several years on national security grounds, but a recent directive barred US firms from supplying Huawei.

This includes components from the likes of Qualcomm and the Android mobile operating system. Although Huawei makes its own processors, replicating elements such as modem chips would take several years and require specific expertise. Meanwhile, the absence of Android would limit the appeal of Huawei devices in the west.

The rules are set to be relaxed, but Huawei is targeted new markets. Brazil is particularly attractive because it is thought the country’s auction of 5G spectrum could be the biggest yet according to rival Nokia.

The US has urged allies to follow its lead and ban Huawei and it would have been thought Brazil’s president Jair Bolsonaro would have been sympathetic to his counterpart Donald Trump’s views. However, the Brazilian government has said it has no plans to exclude Huawei from the market.

Via Reuters