TrendForce: Honor will still face a shortage of wafer supply next year, with a market share of 2%

The semiconductor research department of TrendForce said that even if Huawei sells its Honor business, Honor will still face the dilemma of tight wafer foundry supply in 2021, with an estimated market share of about 2%, while Huawei's is about 4%.

Image source: TrendForce

It is worth noting that considering that Apple will benefit from some of Huawei's high-end orders, as well as Xiaomi, OPPO, vivo and others actively increasing production to grab Huawei's market, it has actually exceeded the market share released by Huawei. The addition of Honor will intensify market competition, and the overall market may subsequently enter a quantitative correction due to over-expanded production plans.

TrendForce predicts that Honor will quickly return to the smartphone market through its existing independent operation model and multi-channel cooperation. For the new Honor team, the biggest concern is still the ban imposed by the U.S. Department of Commerce, including the purchase of components, R&D and design, and GMS installation. Whether Honor can be freed from such restrictions by officially separating from Huawei remains to be determined.

TrendForce points out that Honor used to focus on young groups and had an active online performance, with a high overlap in customer base with Xiaomi. Therefore, its impact on Xiaomi after its comeback is greater than that on OPPO and vivo. However, if it fails to obtain GMS and expand overseas markets, the impact will be limited.

Honor may not be able to continue using HiSilicon chips, and whether it can still be popular with consumers remains to be seen. In addition, the reduction in procurement scale will lead to rising costs, which will test the team's ability to respond to profits and costs.

On November 17, several companies issued a joint statement in the Shenzhen Special Zone Daily, saying that Shenzhen Zhixin New Information Technology Co., Ltd. had signed an acquisition agreement with Huawei Investment Holding Co., Ltd. to complete the full acquisition of Honor brand-related business assets. After the sale, Huawei no longer holds any shares in the new Honor company.

Huawei then issued an official statement in response, pointing out that in the difficult time when industrial technology elements are unsustainable and consumer business is under great pressure, in order to allow Honor channels and suppliers to continue, Huawei Investment Holding Co., Ltd. decided to sell Honor business assets as a whole. Huawei claimed that more than 30 Honor agents and distributors jointly initiated this acquisition, which was also a self-rescue action initiated by Honor's related industrial chain.