Huawei’s Kirin processors threatened as critical semiconductor partner halts business relationship

It seems like things are getting from bad to worse for Huawei as UK-based chip designer ARM reportedly became the latest company to suspend business dealings.

Internal documents obtained by the BBC reveal, ARM has instructed its employees to halt “all active contracts, support entitlements, and any pending engagements” with Huawei as well as its subsidiaries.

ARM’s decision is said to be a move to comply with the recent U.S. trade clampdown. According to the internal document, the company says its technology has designs that are of “U.S. origin”.

ARM licenses crucial semiconductor designs that form the basis of Huawei’s Kirin line of processors which run almost all of Huawei’s and its sub-brand Honor’s smartphones.

Huawei also uses ARM’s designs for its recently unveiled Kunpeng chips. These are used to power its TaiShan-series computer servers, which are designed to provide cloud computing and storage to clients.

In a statement to the BBC, ARM explained it was “complying with all of the latest regulations set forth by the US government”, but declined to comment further.

The company was acquired by Japan’s SoftBank in 2016, is headquartered in the UK but employs 6,000 workers across eight offices in the U.S.

If enforced, the move could make things very challenging, to say the least, for Huawei as the company figures out ways limit its dependencies on American component suppliers in order to stay in business.

The future of Kirin

Huawei is expected to release its latest processor powerhouse, the Kirin 985 in its next major smartphone release which is slated to happen sometime in the third quarter of this year. It is understood that ARM’s decision would not affect the release of the Kirin 985 processor. However, the current situation between Huawei and ARM remains, the next generation of processors after the Kirin 985 may have to be built from scratch.

“We are confident this regrettable situation can be resolved,” Huawei responds

Huawei responded to the latest developments saying:

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