In the latest event in the quickly moving saga that is Huawei’s technology export blacklisting by the United States Government, the BBC has published a report this morning claiming that IP vendor Arm has “suspend business” with Huawei and its subsidiaries. If this is correct, then it would represent a massive setback for Huawei’s hardware development efforts, as the company and its HiSilicon chip design subsidiary rely heavily on Arm’s IP for its products.

According to the BBC News report, Arm has almost entirely severed ties with Huawei, with the company instructing employees that they are not 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”.

Huawei, for its part, is one of Arm’s top customers and a close ecosystem partner, shipping countless numbers of chips and devices with Arm IP in it every year. The company is a leading-edge implementer of new Arm CPU and GPU IP, and in the last few years has been the first vendor to ship chips using Arm’s latest Cortex-A series CPUs. Furthermore, via HiSilicon, Huawei is also an ARMv8 CPU architectural licensee. As a result of their close workings with Arm, Huawei has built up a significant amount of their product portfolio around Arm technologies, including their Kirin consumer SoCs and Kunpeng server SoCs. So being cut off from Arm would touch virtually every aspect of Huawei’s hardware business, from smartphones to networking gear.

Meanwhile Arm, for its part, is headquartered in the UK and not the US. However as a multi-national company, Arm develops its technology around the world, including its major design centers in San Jose and Austin. As a result, according to the report, Arm has deemed that its designs contain “US origin technology”, and as a result make it subject to the US technology blacklist.

What’s less clear, however, is just how much Huawei will be impacted by Arm’s suspension and how soon. The BBC’s report indicates that Arm’s suspension only involves further technology transfers and development, and that the company can continue to manufacture chips based on technology they already have – including chips that have finished development and are coming on the market later this year. In which case Huawei wouldn’t immediately feel the impact of the suspension, as the long lead time on chip design means it would be a bit until that development pipeline runs dry. However it’s not as clear what this means for HiSilicon’s Arm architecture license as a whole, and if and how that could be rescinded.

For now, the full ramifications for Huawei are going to depend heavily on whether they remain on the US technology blacklist, or if at some point they are removed or otherwise granted a waiver. If Huawei is reinstated, then the company can continue development of their current product pipeline – though the company would want to take a hard look at moving away from US-sourced IP anyhow to prevent a repeat of this event. Otherwise if they remain cut-off from Arm, then Huawei is without a doubt going to be left in a tough spot and will be forced to go it alone. This is where the nuances of their Arm architecture license come into play – if the company can legally develop their own hardware using the Arm ISA – but either way Huawei would need to increasingly develop its own IP and license other parts from non-US sources.

Ultimately it’s been clear from the start that the US technology blacklisting would have severe repercussions for Huawei. However of all of Huawei’s US-bound technology partners, there is arguably none more important than Arm. So losing access to Arm’s IP could very well cripple the company.

In the meantime, we’ve reached out to Huawei and Arm for further comment.

Source: BBC News

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  • Yojimbo - Wednesday, May 22, 2019 - link

    2x-5x the price? Not a chance. Products can be made other places. Eventually China will realize they can no longer get away with what they could get away with when their economy was 1/10th the size. They will agree to operate more fairly.

    The trade war is long-term thinking. The US, and the world, really, must apply the pressure now. The status quo can be very difficult to change if there is not a stick to hold. The short term think would be to worry about "economic hardship" over the next 2 or 3 years while the whole thing plays out and then pay for that over the next 50 years while you are robbed blind.
  • wilsonkf - Wednesday, May 22, 2019 - link

    When you say products can be made other places, ask Mr. Trump why he gave up TPP. Everyone knows you don't move out of your old house before finding a new one.
  • Yojimbo - Wednesday, May 22, 2019 - link

    The TPP isn't necessary. You don't solve one problem by creating another. Even Clinton was planning on leaving the TPP, wasn't she? It's Chinese companies that are moving their operations to these other Asian countries, as well as companies from Korea, Japan, Taiwan, and the US.
  • wilsonkf - Wednesday, May 22, 2019 - link

    TPP is necessary to establish SE Asia as a solid production base to US. Sure it is not necessary if you don't mind coupling with China for the next fifty years.
  • Yojimbo - Wednesday, May 22, 2019 - link

    We are just repeating ourselves. I have no idea why you are making such a claim. Companies were already moving their manufacturing out of China before the trade war and without the US entering TPP. Now with the trade war that process is accelerating. The Chinese government is concerned enough about it that they are threatening SE Asian countries not to pick up these manufacturing jobs from China or wealthy, patriotic Chinese will stop tourism to the countries, whike simultaneously telling the Chinese that is their duty to spend tgeir mobey domestically.
  • Notmyusualid - Wednesday, May 22, 2019 - link

  • andychow - Wednesday, May 22, 2019 - link

    At most, prices will increase 25%, because that's the tariff. In reality, it will be less than this, because you can find other suppliers for 2-8% more in most cases. Huawei is a special case, because they both stole technology (nothing new), but also sold to terrorist states. How many phones does Iran buy? Think about that when Huawei decided to sell phones to Iran, they were just laughing at "stupid Americans". I'm just they aren't laughing today.
  • Spunjji - Wednesday, May 22, 2019 - link

    2-5x is indeed silly, but assuming other suppliers will just step in (where they even exist) and not use the tariffs as an opportunity to cut themselves a slice of margin - well, that's just bad business sense.
  • s.yu - Wednesday, May 22, 2019 - link

    They sold phones but also cell towers and other infrastructure, Iran's cell network is IIRC 100% Huawei.
  • Santoval - Thursday, May 23, 2019 - link

    A country that refuses to kiss the ass of the US is not the definition of a "terrorist state". Terrorist states are states which host, sponsor and promote *actual* terrorists, or who systematically murder civilians, either in wars or in foreign embassies. Like Saudi Arabia.
    (such comments are completely incompatible with this website, so I apologize. And I will comment no further on that).

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