UK chipmaker ARM to suspend business with Huawei

22 May 2019190 Views

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Leaked ARM memo reveals instructions on Huawei to staff.

As if Huawei’s troubles couldn’t get worse, UK chip firm ARM has told staff that employees must halt “all active contracts, support entitlements and pending engagements” with the Chinese phone maker.

According to the BBC, which obtained a leaked memo to employees, the move is influenced by US president Donald Trump’s ban, which has already seen US tech giants Google, Intel, Xilinx and Qualcomm meekly conform.

If the move by ARM becomes permanent, it is believed it could present an insurmountable barrier to Huawei’s business going forward. Although Huawei builds its own Kirin processors, it needs a licence from ARM to manufacture them legally. While the ban won’t affect the upcoming Kirin 985, it could affect future products that the Chinese tech firm planned to license from ARM.

In a statement, ARM said it was “complying with all of the latest regulations set forth by the US government”.

Defiant Huawei

Earlier this week the founder of the Chinese telecoms equipment and smartphone maker, Ren Zhengfei, said the company has been preparing for such a ban by the US and won’t be disrupted.

However, the move by ARM – not even a US company – is an unexpected body blow for the Chinese company.

It appears that Huawei might not be the only Chinese firm to be affected by the Trump ban, with Hangzhou Hikvision and Dahua reportedly facing being blacklisted for their alleged role in video surveillance using facial recognition in China.

A new Cold War: Is this the Balkanisation of the internet?

The crescendo of moves against Huawei by the US and its Five Eyes allies indicates the emergence of a new digital iron curtain between the west and China.

It comes at a time when Chinese companies such as Huawei and ZTE are charging ahead of Silicon Valley in terms of 5G and a time that has seen Huawei briefly become the number two phone maker in the world.

However, while smartphones from those made by Huawei and even the “designed in California” iPhone are mostly made in Shenzhen, where China is vulnerable is in relation to the fact that most of the components used in its devices are made elsewhere.

In many ways, the current impasse represents a potential existential crisis for Huawei, which has in recent years seemingly enjoyed unstoppable growth. Where it will end up is anybody’s guess as little has occurred to remove the veil of suspicion surrounding Huawei and the security of its devices and networks, despite the company’s denials.

A bigger problem that now looms is how this will affect the global supply chain for 5G equipment. Tech leaders at companies from Vodafone to Deutsche Telekom have warned that blocking Huawei could potentially set back the roll-out of 5G by years.

John Kennedy is an award-winning technology journalist who served as editor of Siliconrepublic.com for 17 years.

editorial@siliconrepublic.com