Huawei: ARM Memo Tells Staff To Stop Working With China’s Tech Giant
ARM’s designs form the basis of most mobile device processors worldwide.
In a company memo, it said its designs contained “US origin technology”.
As a consequence, it believes it is affected by the Trump administration’s ban.
One analyst described the move, if it became long-term, as an “insurmountable” blow to Huawei’s business.
He said 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.
Cambridge-headquartered ARM had been described as the UK’s largest tech firm until its takeover by a Japanese fund. It employs 6,000 workers and lists eight offices in the US.
In a statement it said it was “complying with all of the latest regulations set forth by the US government”, but declined to comment further.
A spokesman for Huawei said the company “is not commenting at this time”.
What is ARM?
ARM is a chip designer founded in 1990. In September 2016 it was acquired by Japanese telecoms giant Softbank, but remains based in Cambridge, UK.
ARM does not manufacture computer processors itself, but rather licenses its semiconductor technologies to others.
In some cases, manufacturers only license ARM’s architecture, or “instruction sets”, which determine how processors handle commands. This option gives chip-makers greater freedom to customise their own designs.
In other cases, manufacturers license ARM’s processor core designs – which describes how the chips’ transistors should be arranged. These blueprints still need to be combined with other elements – such as memory and radios – to create what is referred to as a system-on-chip.
ARM’s US headquarters are in San Jose, California, and the firm has offices in Washington, Arizona, Texas and Massachusetts.
The BBC has also seen a company memo dated 18 May detailing the implications of the export ban.
On Tuesday 21 May, US government officials issued a 90-day reprieve on the restrictions in order to minimise immediate disruption. But a source at ARM said staff had not been told they could start working again with Huawei or its subsidiaries, even temporarily.
It advised staff to send a note informing Huawei (or related) employees that due to an “unfortunate situation”, they were not allowed to “provide support, delivery technology (whether software, code, or other updates), engage in technical discussions, or otherwise discuss technical matters with Huawei, HiSilicon or any of the other named entities”.
ARM staff that come into contact with employees at industry events must “politely decline and stop” any conversations about the business, the guidance said – stressing that individuals could be held personally liable for breaking the trade rules.
The ban also appeared to apply to ARM China, the China-based company in which ARM Holdings owns a 49% stake. It was set up as a joint venture with a Chinese investment consortium last year in order to enable ARM to develop, sell and offer support for its products in the region.
Huawei told reporters on Tuesday that its “plan B” for software would be to develop its own operating system, something it has already been working on for some time. However, it will be significantly more difficult for the firm to source home-grown components of sufficient quality.
While HiSilicon and Huawei are free to carry on using and manufacturing existing chips, the ban would mean the company could no longer turn to ARM for assistance in developing components for devices in future.
HiSilicon’s upcoming processor, Kirin 985, is due be used in Huawei devices later this year. According to a source at ARM, it is not expected to be affected by the ban. However, the next iteration of the chip has not yet been completed – and is likely to need to be rebuilt from scratch, the source said.
What is not yet clear is whether ARM is acting on its own interpretation of the US rules, or whether it has been advised by the Commerce Department.
“If that interpretation is correct, that’s going to affect every semiconductor company in the world,” remarked analyst Lee Ratliff, from IHS Markit.
“They’re not going to be able to easily replace these parts with new, in-house designs – the semiconductor industry in China is nascent.”