ARM Memo Tells Staff To Halt Huawei Work – Report

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ARM becomes latest chip firm to distance itself from Chinese firm after memo tells staff to halt co-operation

Staff at British chip designer ARM have been told to suspend all business with Chinese networking giant Huawei Technologies.

It comes after President Donald Trump last week signed a national security executive order and immediately following that, Huawei was placed on an ‘Entity List’, which prevents it from acquiring parts and components from US companies.

ARM of course is still based in the UK after it was acquired by Japanese giant Softbank in 2016 and its chip designs are used in most mobile processors around the world. Numerous American chip firms have already halted sales to Huawei, and even Google briefly restricted access to its Android operating system.

ARM Ban

Then earlier this week the US Commerce Department announced a 90-day delay to the imposition of trade restrictions on Huawei.

That means for the next 90 days, the US Department of Commerce will allow Huawei to purchase US-made goods in order to maintain existing networks, and provide software updates to existing Huawei handsets.

Into these developments stepped ARM, after the BBC reported that it had obtained internal ARM documents which instructed staff to suspend business with Huawei.

The ARM memo reportedly instructed employees to halt “all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries to comply with a recent US trade clampdown.

The reason for this, despite ARM being Japanese/British, is that its processor designs apparently contain “US origin technology”. As a result, the Trump ban affects its ability to do business with Huawei.

Huawei is reported to have a three month stockpile of chips, but if the ARM ban becomes permanent, analysts believe it could be a very serious blow to Huawei and its ability to build its own processors via its HiSilicon division, as it uses ARM designs.

In a statement ARM was quoted by the BBC as saying that it was “complying with all of the latest regulations set forth by the US government”. It declined to comment further.

Huawei did email a statement to Silicon UK on the matter.

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

Tax incentives

Meanwhile the Chinese government has announced tax incentives to try and nuture the growth of chip expertise in China.

And Huawei’s founder Ren Zhengfei has according to the Guardian said that the US “underestimates” the Chinese telecom makers’s strength and that conflict with the US is inevitable in the firm’s quest to “stand on top of the world”.

Zhengfei said his company was fully prepared to face US bans on key components.

“The current practice of US politicians underestimates our strength,” Ren reportedly told Chinese media on Tuesday. “Huawei’s 5G will absolutely not be affected. In terms of 5G technologies, others won’t be able to catch up with Huawei in two or three years. We have sacrificed ourselves and our families for our ideal, to stand on top of the world. To reach this ideal, sooner or later there will be conflict with the US.”

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Author: Tom Jowitt
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