The shell penetrates and deals damage if the penetration value is higher than or equal to the thickness of the armor. Penetration depends on the caliber of the shell and the nominal thickness of the armor. Like HE shells, SAP armor penetration is not a function of shell velocity or angle of incidence. SAP is fused with a short delay, like AP. The nose of the casing is thickened to form a penetrator cap, of a sort, with less high explosive than HE but more than AP shells can pack in. Semi-armor-piercing (SAP) shells combine the features of both AP and HE shells. ( link)Includes a discussion of SAP at 0:30. IFHE is frequently paired with the Pyrotechnician skill to recover some of the lost fire chance. It is best used on ships that can both penetrate common armor thresholds with the additional penetration and already have low base fire chance. This skill typically enables cruisers to penetrate the plating of battleships of the same tier but at the cost of fire chance. The commander skill Inertia Fuse for HE Shells increases HE penetration by 25% at the expense of a halved base fire chance (the additional fire chance of signals and skills is not halved). While the penetration damage of a light cruiser's HE might be negligible, multiple and repeated fires are a real danger even to behemoths such as Yamato. For a very heavily armored or angled target, incapacitating modules can be important but setting fires is the main purpose of HE. For a very lightly armored target like a destroyer, AP can simply blow right through it without fusing, doing little damage, while HE will always explode and usually penetrate.
HE shells can be used in different ways, depending on the target. Modules protected by 76mm or thicker armor are immune from blast damage so larger main gun turrets are safe, but most if not all secondary and AA batteries and torpedo launchers are vulnerable, as are engines and steering gear.
Blast damage and fire may be inflicted whether or not it penetrates.