Published: Wed, May 22, 2019
Markets | By Otis Pena

Arm said to have suspended business with Huawei in potentially crushing blow

Arm said to have suspended business with Huawei in potentially crushing blow

While this doesn't explicitly confirm the existence of the Arm staff memo reported by the BBC, it now seems likely that Arm's business deals with the Chinese firm are affected by the USA sanctions.

The Trump administration on Friday blacklisted Huawei - which it accuses of aiding Beijing in espionage - and threatened to cut it off from the USA software and semiconductors it needs to make its products.

ARM said in an internal company memo that its designs contained technology of US origin, the BBC reported.

One must remember that these trade and collaboration bans don't just affect Huawei, they could also have serious consequences on the levels of income for the likes of Arm, Intel, Microsoft, AMD, Alphabet, Broadcom and others.

ARM's chip designs are used to power virtually every major mobile chipset, including those from Qualcomm and Huawei's Kirin processors.

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"ARM is complying with all the laws and regulations set forth by the USA government", a spokesman for the company said Wednesday. The BBC has reportedly seen internal documents, and is reporting that the company sent an internal memo to its employees asking them to pause "all active contracts, support entitlements, and any pending engagements" with Huawei. Huawei's said to have three months' worth.

Calling it an "unfortunate situation", ARM sent a note to Huawei and its related entities that it would not be able to "provide support, delivery technology (whether software, code, or other updates), engage in technical discussions, or otherwise discuss technical matters with Huawei, HiSilicon or any of the other named entities". Huawei has been preparing for a ban on United States technology for some time, stockpiling components and developing an alternative operating system to Android, but the innovations afforded by ARM would be impossible to replace.

With the way things are going, though, we wouldn't be as surprised as we should be if a report claimed Huawei had been working on wholly original chip designs for a while.

ARM has been approached for comment.

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