The Huawei affair took a new turn with the defection of ARM – the company designs the architecture and the hearts which are used by all the founders of the market, including HiSilicon (subsidiary of Huawei), MediaTek, Apple, Qualcomm or Samsung. ARM is not an American company, and many companies across the Atlantic depend on its technologies. So why did you give in so quickly to the White House?
The Huawei case brought to light several things: first, that the international order as we know it is not immutable – and that certain States which established it, and participated in the creation of institutions like the WTO may be on the verge of questioning everything in the long term. Then, that Chinese technologies, and more particularly Huawei and HiSilicon actually depend on American patents. But what is ultimately, without a doubt, the most shocking is that a decree of the United States can have as much effect outside the borders of the country.
Let’s be specific: that the Trump administration decree applies to American companies like Google – either. But what about the decision of the Anglo-Japanese ARM? And above all, why did ARM not try to weigh more in the face of the White House? We propose, together, to explain why.
ARM has the key technologies essential to Kirin SoCs and competitors
In the smartphone industry, ARM technologies have an almost absolute monopoly. To begin with, remember that ARM does not directly manufacture ARM SoCs, but sells the design of its hearts (the famous Cortex and other Mali), MMU, MPU, DSP, FPU and architectures to founders.
HiSilicon, like its competitors Qualcomm, Samsung, MediaTek and Apple, to name a few, can then build their SoCs using these “bricks” for which ARM owns the rights – by paying a license. However, if ARM has a monopoly position, it is because its architecture is particularly efficient, both for energy consumption and performance, that the industry has decided to use only this architecture. Besides the fact that for the founders, developing a clean architecture until now did not really make sense.
This kind of project is indeed extremely expensive, long and uncertain: the result 5 to 10 years later may be poor compared to competing ARM solutions, or not appeal to other manufacturers – at the risk of isolating the platform and to make it an environment that doesn’t interest developers. In short, the ARM decision is very painful for Huawei , especially if the tensions between the United States and China do not subside. However, could ARM have avoided cutting ties with one of the biggest smartphone manufacturers in the world by exercising all its influence?
How ARM made the decision to cut ties with Huawei
First, note that the exact conditions under which this decision appears to have been made are still far from clear. The information originally came from a memo taken up by BBC . A statement taken up by The Verge sheds new light on the behind the scenes that led ARM to make this brutal decision: “ARM complies with the latest restrictions imposed by the United States government and remains in contact with the appropriate US government agencies to s ‘ensuring that we remain compliant […] The relationship between our long-term partner HiSilicon and ARM is important and we hope for a quick outcome around this subject ”.
On the one hand, ARM therefore explains that it is “in contact with the appropriate US government agencies” , on the other, ARM says that it values its relationship with HiSilicon . Originally, the main reason cited by ARM for its decision was that its designs contain “technologies of American origin” – without giving details. However, the firm actually develops part of its designs in Austin, Texas and San Jose, California, which effectively places the production of these subsidiaries directly under American law.