Chip designer, ARM – based in Cambridge, England but now owned by Japan’s Softbank, has decided to suspend all business with Huawei in accordance with US sanctions.
“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.”
ARM itself depends on some technology that underpins these powerful chips, that originate in the US.
The US government has banned all American firms from doing any business at all with Huawei, unless they have explicit permission. Like a dominos effect, Huawei has also lost access to US computer chips from Intel, Google’s Android operating system.
On 20 May, US government officials issued a 90 day reprieve on some of the restrictions in order to try to minimise immediate disruption but ARM believes that this temporary licence does not apply to them.
As it stands for now, ARM’s suspension of business with Huawei could be interpreted as the ‘fatal blow’. These chips also power Huawei’s 5G base stations, affecting the mobile network business (and representing the cybersecurity dispute). As the company will not be able to source Intel or ARM chips at all, their computer business will also struggle.
Huawei are confident the situtation can be resolved.
News just in is that there are rumours that drone manufacturer DJI is also about to be penalised in this dispute… more follows
At the time of writing, the financial markets are gripped with tension as the talks continue to escalate between Beijing and Washington, all eyes are on Trump’s next move.