Date
25 August 2019
A Huawei logo is seen at the firm’s research center in Shanghai. The Chinese telecoms equipment giant is likely to step up development of own technologies in the wake of US sanctions. Photo: Reuters
A Huawei logo is seen at the firm’s research center in Shanghai. The Chinese telecoms equipment giant is likely to step up development of own technologies in the wake of US sanctions. Photo: Reuters

Can Huawei cope without ARM chipset support?

The US trade blacklist on Huawei has prompted several tech firms globally to cut or scale back their business links with the Chinese telecom equipment giant. 

Following the moves of entities such as Google, Qualcomm and Intel, Huawei now has something even bigger to worry about — a decision by UK-based chip designer ARM Holdings to suspend business with the Chinese smartphone maker. 

The BBC reported on Wednesday that ARM informed its staff about the need to stop working with Huawei in view of the US trade ban. 

Employees were instructed to halt “all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries, the UK public service broadcaster said, citing internal ARM documents.

ARM felt it had to take to some action as its chip designs contain “US origin technology”, putting it under the purview of the Trump administration’s ban on dealings with Huawei. 

Though ARM has its headquarters in Cambridge, UK, it develops some processor designs in facilities in the US, which subjects it to US restrictions. 

The move by the British chip designer, which is currently owned by Japan’s Softbank, represents a severe blow to Huawei, as the Chinese firm has been heavily dependent on ARM technology for chip architecture design.

Huawei’s Kirin processors, which it uses in smartphones, have ARM technology underlying them. The firm’s HiSilicon chip division had been licensing processor designs from ARM and customizing them for use by the Chinese telecoms group.

With the British firm now deciding to suspend collaboration, it could greatly crimp Huawei’s ability to develop its chipsets and build its own mobile ecosystem.

That could, in turn, have a major negative impact on the overall business as Huawei is forced to scramble for alternate technology.  

The company may think that it won’t be too difficult to develop its own ecosystem by leveraging on its existing technologies and remaining partners, but the task might prove challenging.

As it is left with few friends from among the global technology supply chain following the US order, Huawei may be compelled to scale back its ambitions in the international smartphone battlefield.

Huawei’s recently launched smartphones and commercial servers all use ARM architecture. With the British firm now shutting the door, Huawei could see its plans for new product launches get affected.

Much would depend on whether the ARM business collaboration suspension would be temporary, or if it stretches for a long period of time.

Huawei said late Wednesday that it is working with ARM about their partnership and that it hopes the situation can be resolved.

“We value our close relationships with our partners, but recognize the pressure some of them are under, as a result of politically motivated decisions,” the Chinese firm said, referring to the US ban.

Huawei stressed that its existing handset users will not be affected by the developments.

From a longer-term perspective, there is no doubt that the recent setbacks will prompt Huawei to accelerate efforts to reduce its reliance on foreign partners and redraw its supply chain.

Caught in the crossfire of a broader trade war between the US and China, the Chinese telecoms gear maker should realize that it can only rely on self-developed technologies if it is to build its own strong mobile ecosystem. 

Huawei appears confident it can ride out the current troubles and emerge unscathed, but the fact remains that it cannot afford to underestimate the risks facing its business.

As of now, the company has little chance of developing a new chip in a short period of time without the support of other patent owners. 

Huawei’s founder Ren Zhengfei has remained defiant about Washington’s moves, saying the US is underestimating his group’s capabilities, but the truth is that lack of support from chipmakers like ARM and Qualcomm could make it impossible for Huawei to develop its own mobile ecosystem to replace Android.

Building a new mobile operating system is not an easy task. Huawei executives tried to play down the negative impact of Google business suspension by saying that Huawei has been developing its own operating system for several years, and that the new system will be ready this fall.

But we should bear in mind that a mobile operating system would involve components and systems from various suppliers. As for the chipset within the smartphone, the component plays an important role in ensuring smoothness of the operating system.

As things stand, Huawei’s Kirin processor needs support from ARM and other component suppliers to help ensure that the mobile devices stand out from both the hardware and software perspective.

Ren said his company has been preparing for the worst after fellow Chinese telecom equipment maker ZTE was targeted by the US government previously. 

Huawei may well have contingency plans in place and try to minimize the damage, but what if more firms join the bandwagon and sever links with the Chinese group in a bid to stay on the right side of the US?

If many key technical partners pull their cooperation, Huawei will confront this question: will it be able to maintain the product pipeline and sustain the smartphone operation as it stands?

As of now, there are no easy answers.

– Contact us at [email protected]

RC

EJ Insight writer

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