Huawei Advances Sale of x86 Server Business
According to Chinese enterprise information inquiry platform Qichacha, the owner of Huawei’s Super Fusion Digital Technology Co., Ltd., which runs the company’s x86 server business, has been changed on Friday. The new major shareholder of the company, Henan Information Industry Investment Co. Ltd., is a subsidiary of the Henan provincial government’s finance department. Accordingly, Huawei’s previously-rumored plans to sell its x86 server business have apparently made substantial progress.
According to Chinese media outlet Yicai, the buyers of Huawei’s x86 server business will be composed of industrial funds, overseas sovereign wealth funds, internet companies, banks and other sources of capital. “This Industrial and Commercial Alteration Registration is only the first step, and other investors will follow up,” one insider close to the deal said.
On November 3, Huawei was reportedly in advanced talks to sell its x86 server business, and that the negotiations between the two parties were progressing smoothly. Huawei declined to comment when contacted by Reuters at the time.
However, a U.S. blacklisting of the company has made it difficult for Huawei to secure processors from Intel; thus, chips based on the x86 architecture would be difficult to produce. Giving up its x86 server business seems to be the best choice for the company. In response to this market rumor, Xu Zhijun, the rotating chairman of Huawei, let slip at a media meeting during the Huawei CONNECT 2021 forum in September this year that he was considering selling the x86 server business and had made contact with potential investors, revealing that the move was in process.
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The ongoing global chip shortage has posed challenges not only for Huawei’s smartphone production, but also for its server business. According to IDC data, at the end of 2020, Huawei ranked fifth in the global server market with a share of 4.9%. However, the company failed to crack the top five global market-share revenue leaders list in IDC’s second-quarter 2021 Worldwide Quarterly Server Tracker, with its server business revenue reaching 3.785 billion yuan ($591.7 million) – a year-on-year decrease of 45.9%.