Report: Huawei Is Losing Access to Critical ARM Chip Designs

Things just keep getting worse for Huawei. After landing on the US Commerce Department’s “Entity List” last week, multiple US companies have signaled they would sever business ties. It may even lose access to the good parts of Android. Huawei, the second-largest maker of smartphones and a huge presence in network hardware, is better equipped than most Chinese firms to weather this storm. However, it may be in deep trouble now that the UK-based ARM Holdings has reportedly decided to stop working with Huawei.

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. ARM is based in Cambridge, so you wouldn’t think that it’s affected by the technology ban on Huawei, but the company believes it is bound by the Commerce Department rules because its designs include “US-origin technology.”

When the US trade ban rolled out, it looked like Huawei’s mobile business could survive with some adjustments. After all, the company makes its own Kirin SoCs (modems included) under the HiSilicon brand. However, ARM’s decision to end its business with Huawei cuts it off from the chip designs it needs to build the Kirin SoC.

Huawei reportedly stockpiled Intel chips and server hardware in advance of the trade ban, but it may not have done the same with ARM chips. It now appears it won’t have a license to use those ARM designs now. And it certainly won’t get any new ARM licenses for future Kirin SoCs unless the trade ban is reversed.

Huawei has issued a brief statement aimed at calming markets, but it lacks any substantive details. Huawei says this move is the result of “politically motivated decisions,” but it doesn’t blame its partners for doing what they feel is necessary. The Chinese telecom giant goes on to say that it remains confident it can resolve the situation. Huawei currently enjoys a brief 90-day pause from the trade ban, which may be a ploy to increase pressure on China in the ongoing trade war with the US. Even if the whole thing fizzles, Huawei’s business has no doubt been hurt.

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