SoftBank Group Corp. -owned chip designer ARM will comply with the Trump administration's order to stop supplying Huawei Technologies Co. with technology vital to the manufacture of the Chinese company's products.
The BBC claims to have obtained an internal memo to ARM staff that instructs employees to end "all active contracts, support entitlements, and any pending engagements" with Huawei.
"We value our close relationships with our partners, but recognise the pressure some of them are under, as a result of politically-motivated decisions", the company stated, addressing Arm's suspension. Huawei also issued a comment on the situation, seen below. The move has dire consequences for Huawei's smartphone ambitions, as ARM's technology forms the foundation of HiSilicon's Kirin chipsets.
Geoff Blaber from tech analysis firm CCS Insight called the development "an insurmountable obstacle for Huawei" since ARM is behind nearly every mobile chip out there, including Huawei's. Qualcomm, MediaTek, Apple, Samsung, and Huawei are all ARM architecture licensees and, as a effect, almost every smartphone on the market uses an ARM-based CPU.
Without ARM, Huawei just can not make a phone.
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For more, read why we think losing Arm is a bigger deal than losing Google for Huawei.
The U.S. later gave Huawei a 90-day license allowing it to continue conducting core business operations; the move was meant to give U.S. companies time to prepare for a broader ban. At the same time, Huawei was put on the US government's "Entity List" - a list of companies which can't conduct business in the USA with government approval.
The US is in particular concerned about the role that Huawei's networking technology could play in the 5G networks just being rolled out by mobile operators. With US sanctions on Huawei having prompted the Japanese-owned, Cambridge-headquartered company to halt co-operation with the Chinese tech firm, this is the business equivalent of an unexpected kick to the bollocks.
Talking about the hardware, the company also has to resource several parts from other companies across the globe to built its products. Huawei is free to continue using the existing chips with the licenses for now.