According to a report from China Business News, at noon on January 7, MediaTek said: “As a newly established independent company, we are currently evaluating the current situation.” MediaTek emphasized that as a global smartphone chip supplier, the company and many OEMs Both have cooperation and are committed to bringing leading technology to global customers and consumers.
The report also said that on the same day, some ODM manufacturers said that they have already participated in the new product project of Honor after independence, using the MediaTek platform, and it is expected to go on sale in mid-2021 at the earliest. But MediaTek did not respond to the news.
(Image source: MediaTek official website)
Qualcomm and Honor resume cooperation
CBN reported on January 6 that it was learned from Honor insiders that the cooperation between Honor and Qualcomm is in progress . Since Honor Terminal is not on the US entity list, approval is not required (for cooperation with US supply chain companies). According to media reports, existing mobile phone supply chain manufacturers are advancing new glory 5G mobile phone R&D projects using Qualcomm chips.
In December 2020, Qualcomm President An Meng said in an interview with reporters that Qualcomm and Honor will have some dialogues, and the future will depend on the specific development of the matter. Meng Pu, chairman of Qualcomm China, said that he looks forward to the opportunity to cooperate with New Honor. "Although Glory has just spun off and become a brand new company, many of the members in New Glory are acquaintances, so it will be smoother to communicate and discuss future cooperation opportunities together."
Recently, Qualcomm launched the Snapdragon 480 (5G) chip based on the Snapdragon 888 chip. This chip is developed based on the 8nm process for the future 5G low-end market. This means that in the future, Honor can use the Snapdragon 5G chip to create a new machine based on the Qualcomm platform.
(Image source: Qualcomm official website)
In addition to Qualcomm, MediaTek is another manufacturer that can supply 3G, 4G and 5G processors on a large scale to smartphone manufacturers. Although MediaTek’s chips have focused on the low-end market before, MediaTek’s recent development momentum has been rapid. According to a report by Counterpoint, a market research agency, in the third quarter of 2020, as smartphone sales rebounded in the third quarter, MediaTek became the largest smartphone chipset supplier with a market share of 31% for the first time .
Huawei sells glory to usher in a win-win situation?
In May 2020, the United States offered its biggest killer. The Bureau of Industry and Security under the Ministry of Commerce announced that it “restricted Huawei’s ability to use US technology and software to design and manufacture semiconductors overseas” to prevent Huawei from bypassing US export controls. Huawei's mobile phone chips directly adopted a strict defense strategy, which directly led to the failure of key supplier TSMC to supply Huawei normally.
On September 15, Huawei officially entered a state of "core shortage". The first to be hit was Huawei's latest Kirin 9000 chip. Huawei's consumer business CEO Yu Chengdong revealed at the Mate press conference that the current reservation for the Mate 40 series has exceeded the reserve. Facing the uncertainty of the way forward, Yu Chengdong said, "No matter how difficult the situation is, our business must continue."
As a result, when Huawei's flagship brand is in a state where it is difficult to protect itself, Honor will naturally be unable to get more help from Huawei when resources are tight.
(Image source: Honor official website)
On November 17, a number of companies issued a joint statement in the "Shenzhen Special Zone Daily" that Shenzhen Zhixin New Information Technology Co., Ltd. has signed an acquisition agreement with Huawei Investment Holdings Co., Ltd. to complete the comprehensive acquisition of the business assets related to the Honor brand . After the sale, Huawei no longer holds any shares in the new glory company.
Unlike other acquisitions, the proposer of this acquisition is not Huawei, but the above-mentioned downstream supply chain companies jointly initiated, Shenzhen Zhixin New Information Technology Co., Ltd. is the subject of this acquisition.
This acquisition is not only a self-help and market-oriented investment initiated by the relevant industry chain of Glory , it can maximize the protection of the interests of consumers, channels, suppliers, partners and employees; it is also a complementary industry, and all shareholders will fully support the new Honor, let New Honor draw on the advantages of all parties in terms of resources, brand, production, channels, services, etc., and participate in market competition more efficiently.
Industrial Securities believes that the sale of Honor is expected to ease the pressure on Huawei’s chips and funds. The inventory of chips can be used to centrally supply Huawei’s mobile phones. New Honor will use its own mid-end price to prevent the outflow of original users . According to Omida data, in 2019, Huawei and Honor's global sales were 180 million and 60 million units respectively, for a total of 240 million units. The latter's overall market share in China reached 13%, ranking fourth.
(Image source: China Business News)
Previously, Tianfeng Securities analyst Ming-Chi Guo stated in a report that if Huawei splits or sells the Honor mobile phone business, the procurement of parts and components of Honor mobile phone will not be affected by the Huawei ban in the United States, which will help the growth of Honor mobile phone business and suppliers , This will be a win-win situation for Honor brands, suppliers and mainland electronics business.
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