Huawei Technologies is in advanced talks to sell its x86 server business after the U.S. blacklisting of the company made it difficult to secure processors from Intel.
According to a Bloomberg report, the Chinese technology giant is trying to sell the server business to a consortium that includes at least one government-backed buyer, for billions of yuan.
Huawei has dropped off IDC’s worldwide server market-share leader list in recent quarters. According to various reports, traditional x86 server sales are under pressure as public cloud service providers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud develop their own chips and build their own servers for some use cases.
However, the x86 server line was not a core business for Huawei. The company has developed its own servers for its cloud-computing business, powered by ARM-based processors that use Huawei’s Kunpeng technology.
Among the potential buys are Henan Information Industry Investment Co. Ltd., a Zhengzhou-based state-owned firm that has been a partner of Huawei’s server business. Consumer electronics maker Huaqin Technology Co. Ltd. and an asset management company representing the Hubei provincial government, are also in the running.
Worldwide server market revenue declined 2.5 percent year over year to $23.6 billion during the second quarter of 2021, while 3.2 million servers were shipped, representing flat growth.