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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  • R0H1T - Wednesday, May 22, 2019 - link

    And letting them be, taking over the world, is such a great idea?
  • Yojimbo - Wednesday, May 22, 2019 - link

    The CCP isn't looking for your validation. The CCP doesn't need your moral condonement to operate and it doesn't care about your moral condemnation. The Chinese people will accept an authoritarian rule as long as it is considered legitimate in terms of Chinese cultural expectations and as long as they provide prosperity to the country. The CCP has probably raised a certain amount of resentment among Chinese as far as their interference in traditional Chinese culture, but they have provided the necessary ecenomic improvement over the past 30 years. The CCP has no intention of relinquishing authoritarian control. If one wishes to oppose authoritarianism in China then giving them special deals to allow them to be more economically successful than they would otherwise be is the wrong way to go. Western intelligentia must have been aware of this, but were arrogant and thought that such a centrally controlled economic expansion was not possible, plus they were probably blinded by their greed when looking at the Chinese market and the Chinese manufacturing capabilities. The CCP outsmarted them, plain and simple.
  • s.yu - Wednesday, May 22, 2019 - link

    "US which led everyone into China thinking they'll mend their ways & become more democratic/less authoritarian"
    No chance of that though. Right now essentially every media, private or state-owned is wasting no time portraying the US as the big bad wolf and Huawei as the innocent sheep. The Party has long instilled the notion in every aspect of society under their direct control that Japan and the US are enemies of all Chinese, on top of their nationalistic brainwash that the fate of all Chinese are tied to the Party (the State, in their words, but they also define the Party as inseparable from the State, using "the choice of the People" as their excuse, as if the People are still capable of making choices) so you must make sacrifices when the Party (again, State in their words) asks for it.
    I'm telling you it's worked, very well. Now the brainwashed make their own connection that Huawei's is an essential part of the State and must be protected at all costs, as such private bans(company scale boycotts directed by the management) of Apple and calls for buying Huawei are popping up in China. Why don't they boycott Intel and AMD? Oh wait...
  • Spunjji - Wednesday, May 22, 2019 - link

    If that were true, the EU would be doing something themselves. Entire trading blocs of nations don't just sit around "hoping" that Trump will fix things for them.
  • eva02langley - Wednesday, May 22, 2019 - link

    I don't see how can Huawei survive this.

    I spoke in the past about chips being almost entirely occidental technology, now we have a good example of this. China cannot do anything without chip makers as of now.
  • Yojimbo - Wednesday, May 22, 2019 - link

    If ARM, which is Japanese and not American, is going along with it, then Huawei will have few options. There's not enough time to develop anything themselves and anything they did develop would not be nearly as good, especially at first, not to mention compatibility issues. Besides, they won't have the borrower's advantage they had when they ascended so quickly the first time.
  • s.yu - Wednesday, May 22, 2019 - link

    Worst case for Huawei they'll just loan more and more and more from China Development Bank, which China uses mainly for infrastructure development but is also Huawei's allowance. I believe they don't have a credit limit there. They could be kept on life support as a national project for years until they're entirely independent of ARM, when they'll be hailed in China as heros, yet a "private company" that's fought and won the "evil" US.
  • Yojimbo - Thursday, May 23, 2019 - link

    I agree China won't give up on the development of the technology, but Huawei as we know it cannot exist if they can't make products. They stand to lose the bulk of their smartphone business as well as lower telecom equipment sales. In 2018 they had over $100 billion in revenue and they employed 188,000 people, according to Wikipedia. There would need to be layoffs. The brand itself is a valuable property, and it has been tarnished internationally already. It will be further tarnished if their market share plunges because they can't put products out. If they can't deal effectively with the customer service problems forthcoming then even more so. When they finally do come out with something on their own it's likely to not be as good as the competition.
  • s.yu - Friday, May 24, 2019 - link

    I agree that they'd have to lay off many people, but I don't see them losing more than 1/3 of the smartphone market, their market position in China will be strengthened by nationalism and they won't lose the whole international market either.
    "The brand itself is a valuable property, and it has been tarnished internationally already." The brand is certainly valuable property, it's probably the most "valuable" brand in China, but I don't know about tarnished, I see even many western media defending Huawei out of obvious or not-so-obvious political reasons or a superficial understanding, and the Trump administration antagonized many before dealing with Huawei inadvertently casting a halo on Huawei.
  • Yojimbo - Saturday, May 25, 2019 - link

    Huawei will definitely received a benefit from nationalism, but I am not sure if it will go so far that the young people will buy phones that they can't be satisfied with. If without Google and ARM Huawei loses functionality and user friendliness from their phones they may suffer even in China. A company can ask all employees to use Huawei, but how many of the employees actually will depends on the energy put into the campaign by all the low level managers and the general peer pressure. And then a university, I think, is not going to be able to seriously pressure all its students to use Huawei, and would it really go so far that the teachers would start shaming the students to follow through on it, anyway? Public announcements and social media trumpeting aren't real sacrifices. By themselves, they don't signify the reality of the situation. What I am trying to say is that yes, if Huawei manages to make competitive products then nationalism will probably carry them to strong market share in China, but if the technology restrictions make their products uncompetitive would an overwhelming majority of consumers who are used to a certain experience really be willing to give that up for the sake of Huawei?

    Regardless, Huawei losing their foreign sales still cuts their revenues in half, I think. In terms of the brand being tarnished, it doesn't have to be a moral judgment. Smartphone consumers are hardly going to be interested in rallying around a smartphone company. Their perception of the brand is not going to be based on what media sources say, but rather on the practical value of the phones. And if their phones lose functionality they lose appeal and that negative change will probably have a negative effect on the perception of the brand. Just a few years of less visibility can kill the momentum of the brand. Right now it's Huawei wow-way and in a few years if they claw their way back, whether through new hardware and software or through the end of the restrictions, it could very well be Huawei, oh yeah, I remember them.

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