(Yicai Global) Aug. 13 -- Chinese telecom giant Huawei Technologies' has completely struck Flex from its supply chain since the US banned its trade with the Chinese firm, causing Flex's factory in Changsha in China's central Hunan province to stop operating.

Since then, orders for mobile phones and notebooks have been swiftly draining from Flex to Hon Hai Precision Industry -- better known as Foxconn -- BYD Electronic and other producers, Yicai Global has learned from the supply chain, and BYD may take over contract production of Huawei's handsets in Hunan.

As the main supplier of Huawei P and Mate series, Shenzhen-based BYD Electronic's revenue from Huawei will increase by 50 percent to 60 percent this year, Guosen Securities (Hong Kong) predicted. Huawei orders make up over 30 percent of its total income, according to BYD's 2018 annual report.

"We do not issue comments on individual customers or products," Taiwan-based Foxconn told Yicai Global, but the firm's Huawei orders skyrocketed in May and June, a Foxconn insider said.

Hangzhou Longqi Technology and Guangdong province-based DBG Technology have also assumed a portion of Huawei's original equipment manufacturer work. Some projects of laptops and tablets got transferred to it, an insider from Wingtech Technology, the famous Chinese innovative developer of fourth- and fifth-generation wireless communications network technology terminals noted, adding it has already built new plants in India, Indonesia and Wuxi, Jiangsu province to expand its production.

In addition to the mobile phone OEM business, Huawei may accelerate its self-construction of mobile phone plants. The company reportedly plans to invest USD800 million in a mobile phone factory in Sao Paulo, Brazil in the next three years to make 5G smart phones for the South American market.

Flex's Chinese unit refused to return around CNY400 million in production equipment, raw materials and semi-finished products belonging to Huawei from its Zhuhai factory after the US banned Huawei in May, according to the source.

Huawei removal of Flex from its supply chain has badly hit the firm's performance. Flex, which is headquartered in the US and Singapore, projects losses of between USD15 million and USD110 million in the next quarter. Huawei lawyers also served a demand letter on Flex on Aug. 5 for "hundreds of millions of yuan" in compensation for unlawfully holding onto about CNY400 million (USD57 million) of Huawei's goods, they claim.

Formerly known as Flextronics, the company formed in Silicon Valley, California in 1969. It opened a factory in Singapore in 1981 to become the first US manufacturer to set up an overseas plant. Flex is the globe's second-largest OEM of electronics after Foxconn.

Editors: Zhang Yushuo, Ben Armour