Losing ARM Is Potentially A Worse Hit For Huawei Than Losing Google May 23, 2019
The loss of ARM will take a long time to impact Huawei but if it ever takes effect, it is likely to have the most devastating impact on Huawei’s business.
The ARM processor family has become one of the most central and fundamental pieces of technology in any device that is not either a PC or a data centre.
Almost every smartphone, feature phone, tablet or wearable uses one or more arm processors and Huawei has been pursuing its own chipset designs. The aim is to become more self-sufficient and to rely less on silicon procured from Qualcomm, MediaTek, Broadcom etc. As long as Huawei has scale and as long as its own chips perform as well as those from third parties, this would also help profitability as margin previously paid out would remain in-house. However, many, if not all, of these designs use the arm processor and with its relationship with ARM on ice, its chip development will grind to a halt.
There are two ways to interact with ARM when using its processor. The first is to licence a processor design created by arm and the second is an architecture licence where the licensee does the chip design itself but is based on arm’s intellectual property. Most silicon designers like Qualcomm, MediaTek or Apple have architecture licences but whichever one, the companies use, they are still dependent on ARM technology. This means that Huawei’s in-house silicon effort will now be at a standstill.
Furthermore, there is no realistic possibility to design a chip that does not use arm because all of the software that is written for mobile devices will no longer run on it. This is why the loss of ARM is potentially even more damaging than the loss of Google as this will also impact shipments into China.