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Due to the US ban: Huawei wants to sell the Honor smartphone subsidiary for 15 billion
Huawei wants to sell its Honor smartphone subsidiary. This reports Reuters with reference to sources familiar with the matter. The budget brand will be sold to a consortium for $ 15.2 billion. This is made up of electronics retailer Digital China and the Shenzhen government. Digital China was previously Honor’s largest smartphone distributor, while Honor’s headquarters are located in Shenzhen.
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As Reuters also writes, Huawei allegedly made this decision due to ongoing US sanctions. The tech group wants to focus on high-end devices and business-oriented businesses in the future.
Difficult future for Honor
The sale will encompass nearly all of Honor’s assets, including branding, research and development, and supply chain management capabilities. The new ownership should also take over a large part of the approximately 7,000 employees. After the Huawei spin-off, the plan is to go public within three years.
Of course, Honor also hopes this will help escape US sanctions. Since Honor does not offer any networking equipment, there is a very good chance that the US could exempt Honor from penalties once the sale is complete. There is no guarantee that the US government will ease the sanctions for Honor.
In our 2017 review, the flagship of the era did well:
In terms of sales, Honor will now have to do a lot on its own. While Digital China was primarily responsible for the brand’s sales in the country of origin, global sales were largely made through Huawei’s sales network. Should Honor still not be allowed to use Google’s apps, the company will likely focus on the domestic market for now.
Huawei continues to blow strong winds
According to Reuters, Huawei may announce the sale on Sunday. So far, however, the Chinese have not commented on the matter. If the sale does indeed take place, it would be an indication of the great pressure that Huawei is under. According to Canalys analysts, Huawei shipped nearly 52 million smartphones from July to September. Of these, 26 percent were Honor phones. The sister brand posted sales of around 12.5 billion Swiss francs last year.
For Huawei, however, there is at least one small positive lining: according to the “Financial Times”, the United States has granted special permits to the first suppliers. Among other things, Sony is authorized to re-supply the camera sensors, while Samsung can restart production for Huawei displays. Presumably, the Commerce Department requires proof that the parts supplied are not installed in devices used for 5G networks or devices that access 5G. Huawei should continue to be prevented from producing 5G networks and compatible end devices such as smartphones.
In return, Huawei is planning its own chip factory, which will be based in Shanghai. This should get by completely without US technology and produce the first chips as early as 2021. Low-end chips with a frame width of 45 nanometers must be produced initially. This means that U.S. patent-free manufacturing is about 13 years behind – Intel first produced 45-nanometer process chips in 2007.
The goal is to be able to produce 28-nanometer chips by the end of 2021. These are at least necessary to produce networked devices for the Internet of Things. The first 5G chips measuring 20 nanometers are expected to roll off the assembly line at the end of 2022. For comparison: Huawei’s latest chip, which still uses US technology, is manufactured using the 5-nanometer process. The 20-nanometer chips may not yet be used for Huawei’s high-end smartphones, but at least for networking equipment. (pls)
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