November 30, 2021

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Huawei will sell the servers division because it is blacklisted by the United States

Huawei will sell the servers division because it is blacklisted by the United States

The exact value of the transaction is unknown.

November 2, 2021 at 3:06 pm TASR

Shenzhen. Chinese telecom giant Huawei Technologies has made progress in negotiations to sell its x86 server division to an unspecified consortium. The reason for selling is that Huawei was blacklisted in the USA, which made it difficult for the company shopping Processors from the American company Intel. Bloomberg News reported, on Tuesday, referring to sources familiar with the matter.

They said the exact value of the deal could not be determined, but it was likely to be billions of yuan.

In recent months, many potential buyers from the government and the private sector have emerged. One of the sources said Henan Information Industry Investment, a Zhengzhou-based state-owned company that is a partner in Huawei’s server business, is a strong candidate. Huaqin Technology, a consumer electronics maker, and an asset management company representing the Hubei provincial government also took part in the talks. It is not clear whether these companies are applying for the server division alone or as part of the same consortium.

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Huawei declined to comment on the news. Potential buyers did not respond to comments.

Huawei, once a dominant champion in mobile phones and communications devices, had to rework its operations after the previous administration of the former president. Donald Trump It launched a large-scale campaign against the Chinese company in 2018. A year ago, Huawei sold its Honor smartphone brand to a government-led consortium in Shenzhen for an undisclosed amount because the US banned US companies like Qualcomm from supplying the Chinese giant with certain components, including That chips.

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Export restrictions require fiscal tax. Huawei said third-quarter revenue fell 38 percent to 135 billion yuan (18.22 billion euros) in the fourth consecutive quarter.

The x86 server division is not a major Huawei division. The company has developed its own servers for its cloud computing business, powered by ARM-based processors using Huawei’s Kunpeng technology.

Huawei has built strong business ties with government-backed companies in Henan province, and according to unnamed sources, it has set up a subsidiary called Xfusion in the provincial capital of Zhengzhou to develop businesses related to Kunpeng-based technologies.

The x86 partition can give it more growth opportunities. Smartphone maker Honor said its split from Huawei has allowed it to re-establish business relationships with major suppliers because it is no longer subject to US restrictions.

(1 euro = 7,4077 Chinese yuan)