US firms supplying 40% parts in Honor smartphones as China struggles

Chinese smartphone brand Honor, which was spun off from its parent company Huawei in 2020 to evade US sanctions, is currently using at least 40 per cent of its parts from American companies like Qualcomm and Micron, media reports said on Monday.

The share of US components in Honor’s latest 5G smartphone X30 has soared to 39 per cent, from just 10 per cent for the 30S model released in 2020 which was manufactured by Huawei, reports Nikkei Asia.

“Most of the X30’s core components, including the processor and the 5G chipset, are supplied by the US makers such as Qualcomm, instead of Chinese suppliers such as HiSilicon, Huawei’s chip developing arm, the report said.

It also means that China is struggling to develop next-generation electronics technologies for smartphones on its own.

“Honor mostly sells its products in China and the separation from Huawei has shielded the company from many of the sanctions,” the report noted.

The estimated production cost of Honor X30 is around $217 and the US components “took the lion’s share of the cost, accounting for 39 per cent of the total”.

The share of Chinese parts plunged 27 points to about 10 per cent.

“The sharply expanded use of US components may mean that Honor has been unable to secure sufficient supplies of cutting-edge smartphone components made in China,” the report noted.

In Honor’s X30 handset, Japanese components like from Sony camera sensors constitute about 16 per cent of the total production cost, claiming the second largest share.

Nikkei, in collaboration with research specialist Fomalhaut Techno Solutions, took apart Honor’s latest smartphone model X30 to figure out the hardware.

Hit hard by the US sanctions, Chinese conglomerate Huawei Technologies last month reported a 28.5 per cent dip in its revenue last year, along with a sharp downfall in its smartphone business.

The company said it was “readjusting” its business portfolio to tap new digital and 5G opportunities.




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