Arm staff told they must cut all ties with Huawei - Components

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So when Huawei talks about its own chips, they are built on Arm architecture and many are actually manufactured by Taiwanese firm TSMC. However, we already know that it has developed its own operating system that will be replacing Android on its devices.

The Arm business model involves licensing its semiconductor designs to third parties, who then incorporate them into their own chips.

This move apparently means that Microsoft has bowed to United States pressure on tech giants to stop doing business with the Chinese company. Google's action immediately ratcheted up tensions between the U.S. and China, with the U.S. for a while now having sounded an alarm to pretty much anyone who'll listen that Huawei may be a proxy for China's central government as well as its national security apparatus.

The company was dealt a blow this week with Google's decision to partially cut off Huawei devices from its Android OS following a USA order banning the sale or transfer of American technology to the firm. Nearly every smartphone or tablet in the world uses ARM-based technology, as ARM holds the patent and intellectual property (IP) rights to the architecture that powers mobile CPUs, GPUs, and SoCs. From official announcements, Huawei said that their backup plan is to migrate away from Android and use HongMeng OS but there are no details about HongMeng OS other than the name itself.

Huawei's Kirin processors, which it uses in smartphones, have ARM technology underlying them.

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

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However, according to The Verge, Microsoft retail stores will continue selling the existing stocks of these laptops until they are all sold out.

As such, it's not unreasonable to assume that Huawei will be legally barred from using anything owned by ARM.

An analyst speaking to the Beeb said that he thought the withdrawal of Arm co-operation would be an "insurmountable" blow to Huawei's business if it was sustained in the longer term. As for the chipset within the smartphone, the component plays an important role in ensuring smoothness of the operating system.

Huawei is also reportedly trying to get European telecoms to offer the App Gallery on Huawei and Honor phones out of the box to help remedy the situation.

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?