What happened: UK-based chip design firm ARM has severed ties with Huawei. According to an internal memo, the decision is in response to last week’s sanctions on China by the US, as ARM utilizes American technology in its chip designs. An analyst described impact of the move, if long-term, as an “insurmountable” blow to the telecom giant’s business.
Why it’s important: Losing access to ARM’s designs may not be immediately destructive for Huawei, but if the two companies do not renew ties, Huawei will be unable to update its devices with new chips and may have to begin building its own from scratch, a process that could take years. Additionally, the Android operating system is designed for ARM-based processors, so in combination with Google’s revocation of Huawei’s Android license, the company will have an even more difficult time providing a user interface for its devices.