Reuters in London reports that British chip designer Cambridge-based ARM, owned by Japan’s SoftBank Group Corp, is stopping supply to Huawei, in compliance with the U.S. blockade of the company. This could be a giant blow to the Chinese telecom company’s ability to make new chips for its future smartphones. Huawei uses ARM blueprints to design the processors that power its smartphones, and licenses graphics technology from the company. The BBC reported on Wednesday that ARM had instructed employees to halt “all active contracts, support entitlements, and any pending engagements” with Huawei.
In the meanwhile, Japanese conglomerate Panasonic Corp which makes components used in smartphones and assembly lines, said they are disengaging with Huawei, selling only a few components to them now.
Though Huawei says it is in control of the situation and confident that it can resolve ARM suspension, this move will severely harm Huawei’s ability to do business in the smartphone sector where they compete with Samsung Electronics Co Ltd.
Currently, US is lobbying Britain hard to boycott Huawei’s products, and a day ago, South Korean newspaper reported similar pressure was being placed on Seoul. Some other countries such as Australia and New Zealand also have blocked the Shenzhen-based firm from bidding for critical contracts due to national security concerns. British mobile operators EE and Vodafone both said on Wednesday they had dropped Huawei smartphones from the imminent launch range of their 5G networks.
However, the Chinese giant has remained unmoved, saying it has the technology to replace supplies cut off by the ban. Huawei only said it valued its close relationships with its partners, but recognized the pressure some of them were under “as a result of politically motivated decisions. “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.”