Inside Honor and Arm wrestling in China

Hello, this is Kenji from Hong Kong. I have been involved with the #techAsia newsletter since its launch in April 2019 and look forward to continuing my involvement in its latest incarnation.

Despite the changes in format, the newsletter’s mission remains the same: to deliver the latest and deepest stories from the Asian tech scene, written by reporters with deep connections across the region.

This week’s top story is a literally deep dive into the latest smartphone from Honor, the former Huawei unit. We also have an exclusive story on Arm and take a look at the challenges of finding the right successor for a unique tech entrepreneur.

I hope you enjoy this issue of #techAsia. We’ll be on hiatus next week for public holidays in Japan and China, and we’ll be back in your inbox on May 12th.

chips on the side

Are Chinese-made chips good enough for the country’s own smartphone makers? To find out, Nikkei’s Norio Matsumoto Take a look inside the latest offering from Honor, the former budget arm of Huawei Technologies.

A Teardown of Honors X30 showed that 39% of the value components came from US companies. This is a sharp increase of just 10% for the previous 30S model when Honor was still below Huawei.

Most of the core parts, namely the processor and the 5G chipsets, come from American manufacturers like Qualcomm and not from Chinese suppliers like Huawei’s HiSilicon chip unit. The overall share of Chinese components also fell from 37.5% to around 10%.

Huawei sold Honor to protect the unit from Washington’s sanctions and allow it to continue using key US parts. Honor remained a Chinese company, bought by a consortium led by an asset manager controlled by the city of Shenzhen.

The teardown underscores how important American technology remains despite Beijing’s all-out efforts to boost its chip industry.

Given their political importance, the use – or not – of home-made chips could be a sensitive issue for Chinese companies. Yang Yuanqing, chairman and CEO of Lenovo Group, said in an online earnings call in February, “As long as these chips are competitive, we will definitely use them in our products.” But he was silent on a key point: how many local chips will be used company actually?

arm wrestling

Arm may finally be on the verge of regaining control of its breakaway unit in China after a two-year standoff with its CEO Allen Wu. Ryan McMorrow and Anna Gross write for them financial times.

The British chip designer will file papers with the Chinese government this week to replace Wu, according to two people with direct knowledge of the matter. Arm plans to nominate two people as co-CEOs of its joint venture in China.

Arm’s fight to regain control of its Chinese unit has dragged on for almost two years after Wu disregarded a 7-to-1 board vote to oust him and unilaterally took control of the company.

He did this by taking possession of the company stamp, the stamp-like object used to authorize all documents in China. It helped that Wu was also the legal representative of the joint venture. Chinese law stipulates that only the legal representative can have a new chop made, while appointing a new legal representative requires a hacked document, leaving Arm and his JV partners in a never-ending bureaucratic loop.

While those close to the situation warn that previous deals to resolve the standoff failed at the last minute, this time they are more optimistic.

The only way out is either a court order — the two sides have three lawsuits pending, but the Communist Party-controlled courts have not yet held a hearing — or the intervention of powerful officials. Arm appears to have eventually spurred these high-ranking Shenzhen officials into action on a plan to transfer his stake in the local entity to its owner, SoftBank Group.

offers down

The business and economic consequences of the Russian invasion of Ukraine were far-reaching. A typical case is this Plunge in high-tech mergers and acquisitions in the Asia-Pacific region, writes Dylan LohSingapore correspondent of Nikkei Asia.

According to data from Refinitiv, such deals in the region (excluding Japan) totaled just $27.6 billion in the first quarter, down 41.7% year over year.

The technology sector — including internet services, e-commerce and semiconductors — had a record year in 2021 as the pandemic forced more people to stay at home, stimulating demand for those services. This year, the war, rising interest rates, and a resurgence of COVID-19 have all cast a shadow over dealmaking activity.

Return, part two

Nidec chairman Shigenobu Nagamori returns as CEO – again. For the second time, the 77-year-old founder of the Japanese automaker will return, replacing his own hand-picked successor as boss, writes Nikkei Asia’s Mitsuru Obe.

Nagamori is an exceptional case in Japan: an entrepreneur who built a truly global company from the ground up, not from the ashes of the post-WWII recovery. While many post-war corporate empires such as Sony and Honda emerged at a time of tremendous opportunity for start-ups, Nagamori and his three partners founded their company in 1973 when the country already had the world’s second largest economy.

His skills and passion have undoubtedly transformed a small factory in Kyoto into the world’s largest automobile manufacturer and made him a major player in the electric vehicle era. But its outsized influence has also made Nidec one of the few publicly traded Japanese companies to officially cite “any sudden departure” of its founder as one of its risk factors. One of the other few examples is SoftBank Group, where Masayoshi Son is also wrestling with the succession issue.

As early as 2001, Nagamori said in an interview that he prefers “itanji,” a term that can be roughly translated as outsider, nonconformist, or dissenter – not a particularly positive attribute in Japan. Two decades later, he still seems to be looking for a successor who is just as much of a lateral thinker as he is.

reading recommendations

  1. Vietnam’s VinFast brings EV fight to Tesla with US push (Nikkei Asia)

  2. DHL boss warns that lockdowns in China pose a risk to the global economy (Nikkei Asia)

  3. US investigates claims top Chinese chipmaker violated Huawei ban (FT)

  4. Skadden loses top lawyer to ByteDance amid China IPO cold (FT)

  5. Tata Superapp offers everything from salt to luxury hotels (Nikkei Asia)

  6. Taiwan’s rise to become the center of chip design threatens US dominance (Nikkei Asia)

  7. SoftBank’s main lender, Mizuho, ​​is “unconcerned” about the tech giant’s financial health (FT)

  8. China’s EV battery materials industry plans to build US$11 billion in capacity (Nikkei Asia)

  9. US-China Tech Race: Brave New World (FT)

  10. Von der Leyen is trying to deepen military and technological ties with the visit to India (FT)

#techAsia is coordinated by Katherine Creel of Nikkei Asia in Tokyo, with support from the FT Tech Desk in London.
Subscribe to Nikkei Asia here to receive #techAsia every week. The editors can be reached at

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