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Renowned Processor Manufacturing Company ARM Ceases Business With Huawei

It seems that the Chinese company, Huawei, is simply unable to catch a break. ARM – a British semiconductor company – has given orders to its employees to cease all business with Huawei following the placement of Huawei on trade blacklist by the USA.

UK’s ARM is a reliable source for semiconductor technology when it comes to smartphones and mobile devices. The company has instructed all of its employees to stop any business that they are conducting with Huawei once it ascertained that the processors’ designs might feature ‘US-origin technology’ and thereby would be forced to abide by the US trade blacklisting of the Chinese company.

ARM is an essential player when it comes to telecommunication technology and would also prove its worth as the worldwide rollout of 5G technology is expected to happen this year. CSS Insight’s Geoff Blaber said, ‘ARM is the foundation of Huawei’s smartphone chip designs, so this is an insurmountable obstacle for Huawei. That said, with an abundance of companies in Huawei’s supply chain already has taken action to comply with the US order, Huawei’s ability to operate was already severely affected.’

What is not clear as of yet is if the company, ARM, ascertained its liability on its own or was it approached by the US Commerce Department and then decided to take this decision. However, what is a given is the fact that if the ARM is taking precautions to avoid running afoul of US trade restrictions, so would many other semiconductor technology companies would be doing the same.

HIS Markit’s Lee Ratliff said, ‘If that interpretation is correct, that’s going to affect every semiconductor company in the world. They’re not going to be able to replace these parts with new, in-house designs easily – the semiconductor industry in China is nascent.’ Huawei has offered to license its technology to governments and companies of Western nations as a part of its worldwide rollout of 5G networks over the next eighteen months. The building of these networks will be affected heavily if the ARM’s decision is actually because of a threat by the US government of legal action.

Alan Burkitt-Gray says, ‘The problem of the whole telecoms industry is that so much of it is based on the exchange of technology between different companies; whether that’s chip companies, software providers or the makers of other hardware. This will carve out a chasm in the industry between Huawei-originated intellectual property and the rest of the world’s. It’s just a total mess, and it’s happened at a critical time for the rollout of 5G.’