UK chip designer Arm Holdings has cut off relations with Huawei to comply with tough US sanctions against it, dealing a blow to the Chinese firm’s ability to develop new smartphones.
Huawei – like Apple and chipmaker Qualcomm – uses Arm blueprints to design the processors that power its handsets, and Huawei also licenses graphics technology from the Cambridge-based firm.
The US blocked Huawei from buying its goods last week, jeopardising ties with Google – which provides the Android operating system and services such as Gmail and Google Maps.
On Tuesday, it temporarily eased restrictions on Huawei, granting it a licence to buy US goods until 19 August, meaning updates of Google apps can continue until then.
But on Wednesday, the BBC reported that Arm – which is owned by Japan’s Softbank – had instructed employees to halt “all active contracts, support entitlements, and any pending engagements” with Huawei.
An internal company memo said its designs contained technology of US origin, according to the report.
Arm said in a brief statement that it was “complying with all of the latest regulations set forth by the US government”.
Huawei said: “We value our close relationships with our partners, but recognise the pressure some of them are 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.”
Huawei’s international trading partners are distancing themselves from the company until there is more clarity over its relationship with the US tech firms that provide apps and services that are crucial for consumers.
UK mobile operators EE and Vodafone both said on Wednesday that they had dropped Huawei smartphones from the imminent launch range of their 5G networks.
The US accuses Huawei of being a national security risk as Chinese state law obliges companies there to cooperate with demands for information by security services.
Huawei denies any suggestion its networks pose a risk.
The controversy over the company comes against the background of a major trade war being waged between Washington and Beijing.