TECH NEWS – The direction of UK-based chip designer ARM has told staff it must suspend business with Huawei, according to internal documents obtained by the BBC.

ARM actually told employees to halt “all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries to fully comply with a recent US trade restriction.

ARM‘s semi-conductor designs form the basis of most mobile device processors in the whole world.

While it’s a UK-based company, in a company memo, it said its designs contained “US-origin technology”, and as a consequence, it believes it is affected by the Trump administration’s ban.

One analyst described the step, if it became long-term, as an “insurmountable” setback to Huawei’s business. The analyst said that it would significantly affect the firm’s aptitude to develop its own chips, since many of them are currently based on ARM’s underlying technology, for which it pays a license.

ARM, which is a Cambridge-headquartered had been described as the UK’s largest tech firm until its takeover by a Japanese fund. It employs 6,000 workers and lists eight offices in the US.

In a statement, it said it was “complying with all of the latest regulations set forth by the US government”, but declined to comment further.

A spokesman for Huawei said the company “is not commenting at this time”.

ARM is a chip designer which was founded in 1990. In September 2016 it was acquired by Japanese telecoms giant Softbank but remains based in Cambridge, UK.

Source: BBC