ARM, a chip designing company based in the UK has told staff it must suspend business with Huawei, according to internal documents obtained by the BBC.
The employees were instructed to halt “all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries to comply with a recent US trade clampdown.
ARM is not a manufacturer of processors, but their CPU IP currently sits at the core of most mobile devices, holding a dominant market share within the smartphone and tablet markets. Creating smartphones without ARM’s IP is practically impossible, making ARM’s suspended business ties with Huawei devastating.
In a statement to the BBC, ARM stated that they were “complying with all of the latest regulations set forth by the US government”, while Huawei stated, “We value our close relationships with our partners, but recognise 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.”
An analyst described the move as an “insurmountable” blow to Huawei’s business, adding that 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 licence.