ARM cuts ties with Huawei, threatening future chip designs

A major blow to Huawei.

Chip designer ARM has suspended business with Huawei, threatening the Chinese company’s ability to create its own chips. BBC News reports that ARM employees have been instructed to halt “all active contracts, support entitlements, and any pending engagements” with Huawei due to the US trade ban. The US has banned any US companies from doing business with the Chinese telecom giant without permission from the American government, but ARM is based in the UK and owned by the Japanese SoftBank group.

ARM is concerned it is affected by the US ban, with an internal memo reportedly revealing that its chip designs include “US origin technology.” ARM develops some processor designs in Austin, Texas and San Jose, California, which could place it under the US restrictions. Huawei relies on ARM for chip architecture designs for its own Kirin processors, and it pays to license these. Without the licenses, Huawei will not be able to continue manufacturing its own processors using ARM designs and its HiSilicon fabless semiconductor company.

“ARM is complying with all of the latest regulations set forth by the US government,” says an ARM spokesperson in a statement to The Verge. The company is not commenting any further about its decision.

“We value our close relationships with our partners, but recognize the pressure some of them are under, as a result of politically motivated decisions,” says a Huawei spokesperson in a statement to The Verge. “We are confident this regrettable situation can be resolved and our priority remains to continue to deliver world-class technology and products to our customers around the world.”

ARM’S DECISION COULD BE JUST PRECAUTION FOR NOW

It’s not clear whether ARM is simply reacting cautiously to the US Commerce Department order, or whether it has been advised to halt business with Huawei directly. If it’s the latter then ARM’s decision could be mirrored by other semiconductor companies that also supply Huawei.

Huawei has reportedly stockpiled enough US-made parts to last three months to a year, so it might have enough to keep operating. That stockpile will run out at some point in the future, especially on parts that are severely constrained in supply lines. Huawei currently relies on US-based manufacturers like Micron, Skyworks, and Qorvo that supply storage and networking components for some of Huawei’s phones.

Even without access to these key components Huawei faces a challenge, but without ARM’s architecture designs or instruction sets it faces a nearly impossible task of manufacturing a smartphone without US technology inside.

Source: Tom Warren|@tomwarren (The Verge).

~Best Feeds ™...