There’s a difference between setbacks and catastrophes. Huawei losing Google, Intel, and Qualcomm as suppliers is a setback. ARM reportedly cutting ties with the company, on the other hand, could be a bona fide catastrophe.
The BBC today reported that ARM told employees to suspend "all active contracts, support entitlements, and any pending engagements” with Huawei because of the company’s addition to a blacklist by the U.S. Department of Commerce.
It might seem weird for a Japanese-owned company based in the UK to cut ties with a Chinese firm because of U.S. trade restrictions. But ARM said its products rely on tech from the U.S., so it has to abide by its regulations.
ARM didn’t send a new memo in response to the 90-day temporary license the U.S. issued to let Huawei suppliers do business with the company. Instead, ARM warned its employees not to even talk to their counterparts at Huawei unofficially.
Huawei remained hopeful as more and more American companies, ya know, planned to follow U.S. law by no longer working with it. Components? Huawei’s said to have three months’ worth. Operating systems? Huawei’s covered.
But losing ARM (no word on LEG) effectively scuttles Huawei’s plans to design its own chips, because those processors would almost certainly rely on ARM designs, just like pretty much every smartphone and tablet on the market.
China’s semiconductor industry simply isn’t prepared to design and manufacture chips that aren’t based on American tech. Huawei would have to work a miracle to be unaffected by losing the ability to build on top of ARM’s foundation.
With the way things are going, though, we wouldn’t be as surprised as we should be if a report claimed Huawei had been working on wholly original chip designs for a while. This should be a catastrophe; let’s see if Huawei can avert it.