ARM Suspends Business With Huawei, Threatening Chip Designs in the Future

Huawei takes another heavy hit as ARM Holdings, a British semiconductor and software design company, cuts ties with it to comply with U.S. sanctions.

Yesterday, according to an internal document received by BBC, UK-based chip designer ARM has told its staff that they must suspend business with Huawei. ARM instructed employees to halt “all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries to comply with the recent US trade clampdown.

Even though ARM is a UK-based company, it is concerned that it must comply with decisions made by the U.S. government because its designs contained “US origin technology”. Certain processor designs of ARM are produced in Austin, Texas and San Jose, California, which could result in these being placed under the US restrictions.

ARM’s designs form the basis of most mobile device processors worldwide. The company does not manufacture computer processors itself, but rather licenses its semiconductor technologies to others.

Huawei‘s own Kirin processors that are used in its smartphones rely on ARM’s chip architecture designs. Without the licenses, Huawei will not be able to continue manufacturing its own processors using ARM designs, and could seriously impact its smartphone business that heavily rely on these chips.

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ARM China cancelled its new product (AI related) conference scheduled to be held in Shenzhen in early June was notified of “cancellation”, and there was no specific delay plan.

According to Chinese media, Huawei also issued a short statement regarding the issue and the predicament that itself and its partners are facing.

“We value the close relationships with our partners, but we also recognize the pressure on some of them due to politically motivated decisions. We believe that this regrettable situation can be resolved, and our top priority remains to continue to provide world-class technology and products to our global customers,” Huawei says in an official statement.

ARM is a chip designer founded in 1990. In September 2016 it was acquired by Japanese telecoms giant Softbank, but remains based in Cambridge, UK.