This just isn’t Huawei’s week. After vital chip suppliers drop out and the company’s Android license gets pulled, Huawei loses ARM technology in a huge blow to its industry. ARM is the basis for most phone processors worldwide, leaving Huawei in a difficult situation.
The decision is another effect of the new United States policy regarding telecommunications technology sent to China. Despite ARM being a United Kingdom-based company, their processors have materials that originate from the states. Therefore, the new laws restrict them as well.
Without the use of ARM, Huawei will not be able to make phones in the long-run. Losing the Android license was tough, but Huawei could carry on without it. Chip suppliers were also important, but Huawei has been stockpiling its own. ARM provides vital semiconductor technology licenses to create processors that Huawei does not yet know how to make on its own. Without ARM, it will be next to impossible for Huawei to continue creating phones.
ARM staff told employees to cease “all active contracts, support entitlements, and any pending engagements” with Huawei and subsidiaries in response to the new U.S. trade laws. Huawei responded to the move in a brief statement:
“We value our close relationships with our partners, but recognize the pressure some of them are under, as a result of politically motivated decisions. 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.”
Without ARM, it is unlikely that Huawei can move forward with phone technology. Even ARM China, a China-based company created for ARM to develop and sell products in the region, had to cease trade with Huawei as ARM Holdings owns a 49% stake.
Huawei could potentially create chips on its own using its source, HiSilicon. However, even HiSilicon uses ARM technology in its chips. Unless the trade clampdown is lifted, Huawei will be forced to think of a “plan B” or be knocked out of the phone market altogether.