September 26, 2019 / 8:42 AM / 18 days ago

UPDATE 3-Huawei says it has begun producing 5G base stations without U.S. parts

* Huawei to make 1.5 mln 5G base stations in 2020 without US parts

* Says willing to license out 5G technology to U.S. firm

* Huawei not afraid of creating a rival by licensing out 5G tech (Recasts and writes through)

By Sijia Jiang

HONG KONG, Sept 26 (Reuters) - Huawei Technologies Co Ltd said it has started making 5G base stations without U.S. components and that total production of 5G base stations should more than double next year as more countries introduce the technology.

The company will start mass production of U.S. component-free 5G base stations next month, founder and CEO Ren Zhengfei told a forum on Thursday.

"We carried out the testing in August and September, and from October on we will start scale production," Ren said, adding that initially it would begin making 5,000 U.S. component-free 5G base stations a month.

Annual production next year is expected to hit 1.5 million units, compared with 600,000 estimated for this year which includes those made with U.S. components and those without.

The world's largest telecoms gear maker has been on a U.S. trade blacklist since May over concerns its equipment could be used by Beijing to spy. Huawei has repeatedly denied such allegations but has taken steps to minimise the impact.

The sanctions have resulted in the loss of access to key technologies and the latest version of its Mate 30 flagship phone, for example, will not come with Google Mobile Services.

Will Zhang, Huawei's president of corporate strategy, told Reuters the performance of the U.S.-free base stations was "no worse" and the company "has had positive surprises". He declined to give details.

Ren said Huawei would still like to use U.S. components if possible because the company has "emotional ties" with long-time U.S. suppliers.

Ren said this month he is open to selling the firm's 5G technology - including patents, code, blueprints and production know-how - to Western firms for a one-off fee.

On Thursday he went further, saying Huawei was willing to license its 5G mobile technology to a U.S. company, and that he was not afraid of creating a rival by making Huawei's technology available to competitors.

The offer could also include chip design know-how, he added.

Huawei, also the world's No.2 smartphone vendor, has said the U.S. ban could push its smartphone unit's revenue lower by about $10 billion this year. (Reporting by Sijia Jiang; Writing by John Ruwitch; Editing by Susan Fenton and Edwina Gibbs)

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