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ARM HAULTS ALL BUSINESS WITH HUAWEI

ARM, UK chip designer, instructs its staff to suspend business with Huawei. This is contained in the internal documents circulated amongst the staff. In the document, the ARM instructed its employees to halt “all active contracts, support circulated amongst the staff. , and any pending engagements” with Huawei and all of its subsidiaries. This is in accordance with the US trade clampdown.

Before now, ARM designs form the basis of most mobile device processors used by Huawei.

In a company memo, it stated that its designs are of “US origin technology” and it believes it is affected by the Trump administration’s ban.

Worries are that if this becomes long term, it will have an “insurmountable” blow to Huawei’s business.

He said it would greatly affect the firm’s ability to develop its own chips, many of which are currently built with ARM’s underlying technology, for which it pays a lisence.

Cambridge-headquartered ARM had been described as the UK’s largest tech firm until its takeover by a Japanese fund. It employs 6,000 workers and lists eight offices in the US.

In a statement it said it was “complying with all of the latest regulations set forth by the US government”, but declined to comment further.

Huawei has issued a brief statement of its own.

“We value our close relationships with our partners, but recognize the pressure some of them are under, as a result of politically motivated decisions,” it said.

“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.”

ON ARM

ARM is a chip designer founded in 1990. It was acquired by Japanese telecoms giant Softbank. It however remains based in Cambridge, Uk. The company doesn’t manufacture the computer processors itself: it licenses its semiconductor technologies to others.

n some cases, manufacturers only license ARM’s architecture, or “instruction sets”, which determine how processors handle commands. This option gives chip-makers greater freedom to customise their own designs.

In other cases, manufacturers license ARM’s processor core designs – which describes how the chips’ transistors should be arranged. These blueprints still need to be combined with other elements – such as memory and radios – to create what is referred to as a system-on-chip.

As a result, when you hear talk of a device being powered by a Samsung Exynos, Qualcomm Snapdragon or Apple A11 chip – or one in a Huawei smartphone – it is still ARM’s technology that is involved.

ARM’s US headquarters are in San Jose, California, and the firm has offices in Washington, Arizona, Texas and Massachusetts.

The Real Situation.

In the memo, the staff were instructed to suspend all interactions with Huawei and its subsidiaries.

It advised staff to send a note informing Huawei (or related) employees that due to an “unfortunate situation”, they were not allowed 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”.

ARM staff that come into contact with employees at industry events must “politely decline and stop” any conversations about the business, the guidance said – stressing that individuals could be held personally liable for breaking the trade rules.

The ban also appeared to apply to ARM China, the China-based company in which ARM Holdings owns a 49% stake. It was set up as a joint venture with a Chinese investment consortium last year in order to enable ARM to develop, sell and offer support for its products in the region.

‘Insurmountable obstacle’

Huawei told reporters on Tuesday that its “plan B” for software would be to develop its own operating system, something it has already been working on for some time. However, it will be significantly more difficult for the firm to source home-grown components of sufficient quality.

Huawei currently sources some of its chips from HiSilicon, which it owns. However, while produced in China, HiSilicon’s chips are built using underlying technology created by ARM.

While HiSilicon and Huawei are free to carry on using and manufacturing existing chips, the ban would mean the company could no longer turn to ARM for assistance in developing components for devices in future.

HiSilicon’s upcoming processor, Kirin 985, is due be used in Huawei devices later this year. According to a source at ARM, it is not expected to be affected by the ban. However, the next iteration of the chip has not yet been completed – and is likely to need to be rebuilt from scratch, the source said.

Huawei also uses ARM’s designs for its recently unveiled Kunpeng chips. These are used to power its TaiShan-series computer servers, which are designed to provide cloud computing and storage to clients.

The relationship between ARM and Huawei engineers is tight – earlier this month Huawei announced its intention to build a research centre only 15 minutes from ARM’s headquarters in Cambridge, UK.

“ARM is the foundation of Huawei’s smartphone chip designs, so this is an insurmountable obstacle for Huawei,” said Geoff Blaber, from CCS Insight.

“That said, with an abundance of companies in Huawei’s supply chain already having taken action to comply with the US order, Huawei’s ability to operate was already severely affected.”

What is not yet clear is whether ARM is acting on its own interpretation of the US rules, or whether it has been advised by the Commerce Department.

“If that interpretation is correct, that’s going to affect every semiconductor company in the world,” remarked analyst Lee Ratliff, from IHS Markit.

“They’re not going to be able to easily replace these parts with new, in-house designs – the semiconductor industry in China is nascent.”

MORE ON HUAWEI HERE

CULLED FROM: BBC NEWS

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