Due to US sanctions, Huawei is selling the low-cost brand of Honor phones :
The Chinese telecoms giant “Huawei” announced, on Tuesday, that it has sold its brand of low-cost smartphones, “Honor”, to a local business consortium. Because of the “tremendous” pressure on its supply chain as a result of US sanctions.
The “Honor” brand was bought by a consortium of 40 companies that includes agents, distributors and other companies whose lives depend on this brand, according to what Huawei and the alliance announced in separate statements.
Huawei, one of the three largest companies in the world in the field of smart phone manufacturing, said that its production is “under enormous pressure” due to the sanctions imposed on it by the United States, which prevented it from obtaining enough electronic components to manufacture low-cost phones.
“The sale will help Honor sellers and its suppliers to overcome this difficult time,” Huawei said in a statement.
The brand, aimed primarily at young people and those with limited budgets, sells about 70 million phones annually, according to Huawei.
Huawei stressed in its statement that after this sale, it no longer owns any shares in its previous company, and “no longer participates in business management or decision-making in the new Honor company.”
US President Donald Trump’s administration imposed sanctions on Huawei on suspicion of spying for Beijing, which the Chinese group denies. Under US sanctions, the company is banned from obtaining essential American technology for its phones.
Since September, Huawei is no longer able to supply its advanced devices with the new Kirin chips, for example, and does not have the ability to manufacture them internally, and it is no longer able to access Android system updates, which is the operating system of the group. Google, the US dominant mobile operator.
And last August, Reuters quoted the financial magazine Caixin that Huawei would stop manufacturing Kirin chips in September, with the growing impact of US pressure on the Chinese technology giant.
The CEO of Huawei’s Consumer Business Unit, Richard Yu, said at the launch of the company’s new phone, “Mate 40” (Mate 40) – that US pressure on Huawei’s suppliers made it impossible for the company’s HiSilicon chip division to continue making chips. The main components of a mobile phone.
The Reuters report said that in light of the deterioration of relations between the United States and China, Washington is pressing governments around the world to pressure Huawei, under the pretext that it is handing over user data to the Chinese government with the aim of spying, and Huawei denies that it is spying for China.
In May, the US Commerce Department issued orders requiring US software and manufacturing equipment suppliers to refrain from doing business with Huawei without first obtaining a license.
Huawei’s Hi Silicon division relies on programs from US companies such as Cadence Design Systems Inc or Synopsys Inc. to design its chips, and the division also uses external production sources for TSMC. “(TSMC) Taiwan, which uses equipment from American companies.
Hi Silicon produces a wide range of chips, including its line of Kirin processors, which only power Huawei smartphones, and are the only Chinese processors that can compete with what Qualcomm produces.
Source: French + Reuters