Honor establishes microchip subsidiary

The news about the expansion of Huawei’s former sub-brand, as Gizmochina points out, seems to be no coincidence: not long ago, Honor’s rival Oppo closed its chip division and laid off an impressive staff.

In addition to chip design and production, Shanghai Honor Intelligent Technology Development will also develop related software, including artificial intelligence, and promote and sell new products.

This will be Honor’s fifth “research center” in China, with other R&D companies based in Beijing, Shenzhen, Xi’an and Nanjing.

While Honor has not explicitly confirmed whether developing its own chips will be part of the subsidiary’s activities, the move has received particular market attention in the context of Oppo’s past actions.

The rival corporation specifically stressed that the dissolution of the chip development team was caused by uncertainty in the global economy and the smartphone market, but experts still suspected some non-financial factors behind such a decision.

At the same time, Xiaomi, another major Chinese smartphone maker, has just confirmed that it will invest in chip development in the near future, considering it a critical element of its core business.

Honor CEO Zhao Ming said the company’s chip strategy will be determined based on specific circumstances. He stressed that the decision to develop it internally or cooperate with external partners will depend on the needs of the market.

In March, Honor introduced its first proprietary RF communication chip, the Honor C1, designed to amplify 5G signals. However, the company recognizes that it needs the support of powerful players like Qualcomm or MediaTek to build more complex systems.

Despite a 14% decline in total smartphone shipments in China in 2022 due to the economic downturn, Honor managed to increase shipments by 30% to 52.2 million devices. As a result, its market share increased from 12% to 18%, second only to Oppo’s sister brand Vivo.