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 revealing that its chip designs include “US origin technology.” 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.
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.
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