Brian Barrett, WIRED
How do you kill a company? The answer, in the context of Chinese electronics giant Huawei, appears to be deprivation, removing ready access to the elements that distinguish smartphones from very expensive chunks of anodized aluminum and glass. The latest blow: Chip designer ARM has reportedly severed ties with the company. Huawei could arguably survive without Google. Without ARM? Not so much.
It’s important to clarify that nothing at this point is certain, or permanent. The BBC first reported ARM’s move Wednesday morning, citing an internal memo that noted ARM’s use of "US origin technology,” which makes it subject to a sweeping ban put in place by the Trump administration. ARM finally confirmed the ban Wednesday afternoon. As it did with Google, though, the US Commerce Department could grant a waiver that allows ARM to continue servicing Huawei. And broader tensions between China and the US could otherwise resolve, potentially taking some of the pressure off Huawei.
But if those caveats don’t come through? It’s hard to see where Huawei goes from here.
Even if you’ve never heard of ARM, you interact with its technologies every day. The company makes the designs that manufacturers like Qualcomm use to produce chips. ARM-based CPUs power everything from smartphones to Internet of Things devices to, more recently, data centers.
ARM’s ubiquity also has increasingly let smartphone companies produce their own chips, in a bid to wean themselves off of Qualcomm and create purpose-built processors. Huawei was an early ARM acolyte; its subsidiary, HiSilicon, has made ARM-based systems-on-chips since at least 2012.
"All of the options are going to be painful."
Eric Hanselman, 451 Research
Conventional wisdom to this point had been that Huawei’s CPU self-reliance would be an important factor in fending off US offenses. Even if Google cuts ties—which it did, until receiving that 90-day waiver—Huawei could still create a functional operating system by creating a so-called Android fork, and convincing developers to tailor their apps to Huawei’s modified version. Huawei customers would have to live without the Google Play Store and related apps, but those felt like solvable problems, especially in a Chinese market that already has plenty of available alternatives.
As usual, US sanctions reek of mendacity and hypocrisy. No point in seeking a valid explanation.
But the open-source version of Android is designed for ARM-based chips. It also works on x86 processors, made by Intel, AMD, and others, but those US-based companies had already cut ties with Huawei as part of the sanctions. Which means, absent ARM, Huawei’s most obvious backup plan effectively goes poof. The company would need not only to redesign its own chips from scratch—a process that takes years—it would find itself cut off from the world’s most popular operating system. This is like telling Coca-Cola that it can’t use carbonated water.
"All of the options are going to be painful,” says Eric Hanselman, chief analyst at 451 Research. “Changing out a core means you’ve got to do significant work not only in the silicon, but also in your software ecosystem. That’s not going to be simple.”
A Slow Fade
Losing access to ARM won’t cripple Huawei overnight, even in a worst-case scenario. The electronics giant will still be able to use its current, licensed technology, which means that it can continue to package any chips already in play. Mobile processors generally receive annual bumps; Huawei introduced its Kirin 980 SoC last fall, and it would have continued to ship it for the next several months regardless.
But going forward, if the ban holds up, Huawei handsets will become frozen in time. The BBC reports that its upcoming chip, the Kirin 985, may have snuck in under the wire, but after that the company will be stuck on the latest and greatest ARM designs as of May 22, 2019. To become unstuck, it will need to embark on the costly, time-intensive process of designing its own core. The question is whether customers will bother to wait it out.
The damage would also extend far beyond smartphones. “Every place where Huawei uses ARM IP would be impacted,” says Patrick Moorhead, founder of Moor Insights & Strategy, “all the way from embedded IP in tiny surveillance devices to large enterprise data center chips.”
This is like telling Coca-Cola that it can’t use carbonated water.
What remains unclear, and could make the difference between devastation and inconvenience, is exactly which ARM technologies are impacted. It’s an international company, recently acquired by Japanese giant Softbank but with headquarters still in the UK. Huawei’s fate may hang in the balance of whatever slice of ARM’s offerings originated in the US, where the company has eight offices and a long-running research partnership with the University of Michigan.
“If it is some of the system-on-chip capabilities, if it’s some of the architecture extensions, things like that, the resolution could be relatively simple. You just design that technology out,” says Hanselman. “If it happens to be core instruction set, or core logic, then that would be a whole lot more difficult.”
“ARM is complying with all of the latest regulations set forth by the US government,” the company said in a statement. "ARM values its relationship with our longtime partner HiSilicon and we are hopeful for a swift resolution on this matter," it added in a follow-up statement several hours later. "Under the current restrictions ARM cannot license any export-restrictive IP to HiSilicon."
Huawei has reportedly been stockpiling US-made parts for as long as a year, in anticipation of the current crackdown. But the ARM move potentially obviates that preparation, by limiting the extent to which Huawei can go it alone.
"Huawei values its relationships with all partners around the world and understands the difficult situation they are in," the company said in a statement. "Our top priority remains to continue delivering world-class products to our customers. We are hopeful this situation will be resolved and are working to find the best solution."
It also underscores the stakes that the US has established. The Trump administration had previously brought Chinese tech company ZTE to the brink of collapse, but that imbroglio centered on specific deals ZTE made with Iran and North Korea, for which it offered specific remedies in the form of fines and a leadership overhaul. The Huawei tensions are much more amorphous; the White House has labeled it a national security threat without specifying why or how, leaving no clear path for resolution. Other companies seem likely to face a similar fate; The New York Times reported Tuesday that the US may blacklist Chinese surveillance company Hikvision over its role in oppressing the country's Uyghur population.
And while there’s always a chance that a 90-day waiver for ARM will come through, as it did with Google, it won’t be a given. “License requests involving Huawei or its affiliates will be reviewed under a presumption of denial,” a Commerce Department spokesperson said in a statement.
There are ways for Huawei to survive without ARM. But in the ongoing siege of one of China’s most important companies, the US has unquestionably cut off its most important supply route.
This story has been updated to include a statement from Huawei and further comment from ARM.
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