Pedestrians pass a Huawei store in Beijing on Thursday. The Chinese telecom giant said Thursday that it could roll out by the fall its own operating system for smartphones and laptops in China. Photo: AFP

UK-based chip designer Arm set a bad precedent by cutting off China's Huawei, putting the spirit of contracts and free market competition behind politics, Chinese analysts said Thursday. Such behavior, as part of the China-US tech cold war, will ruin vivid collaboration on a broader scale, and no one will win in an isolated world, they noted.  

Arm is reportedly cutting ties with Huawei, claiming that its designs contained US-origin technology that will be affected by the export controls issued by US authorities. 

An Arm spokesperson said the company wouldn't comment on the reports, but the company "is complying with all the laws and regulations set forth by the US government," according to a statement the company sent to the Global Times late Wednesday night.

"Arm China attaches great importance to our long-term partnership with HiSilicon," a spokesperson of Arm China told the Global Times on Thursday. 

The spokesperson noted that the firm is now actively communicating with the Huawei subsidiary to seek proper solutions in line with laws and regulations. 

US authorities earlier added Huawei and its affiliates to a so-called Entity List, which bans the Chinese telecom giant from buying parts and components from US companies without US government approval.

On Monday, the US Department of Commerce issued a 90-day temporary license granting operators to make other arrangements. 

This aggressive embargo launched by the Trump administration has disrupted the supply chain in not only the US, but also Europe and Asia, and raised tensions over possible suspensions of cooperation with Huawei among its major suppliers. 

Taiwan Semiconductor Manufacturing Co, the largest contract chipmaker in the world, confirmed with the Global Times on Thursday that the current shipping practice can be maintained, while all future shipments of wafers or delivery of technology will follow a due diligence process to ensure compliance with trade rules.

After some media reported that major Japanese suppliers, including Panasonic and Toshiba, were suspending shipments to Huawei, Panasonic China denied the reports and claimed that its supply to Huawei is normal. 

Toshiba China also denied the reports in late afternoon by saying that it is reviewing part of its products in line with the requirements of the Entity List, but said it has not stopped working with Huawei, according to a statement released on the website of Toshiba China on Thursday. 

"Suppliers keep a close eye on what's going on, while some reports are intended to create panic among them," a source close to the matter who requested anonymity told the Global Times on Thursday. 

The Chinese Foreign Ministry cited the case of Alstom on Thursday when asked about Huawei, saying that the US government has always used the power of the state to clamp down on competing companies from other countries. 

"Huawei's major suppliers' clarification on alleged cut-offs indicated that no company would neglect their own interest to blindly follow the unreasonable and selfish request of other countries," Lu Kang, spokesperson of the ministry, said at a routine press briefing on Thursday. 

Limited impact 

Some industry representatives believe Arm's move will deliver a significant blow to Huawei, as the company's major self-developed chipsets and mobile devices are based on Arm architecture. 

Along with Intel's X86 structure, Arm and X86 architecture are considered the lifelines of the CPU market and the core engines for smart devices. 

"This is far bigger than just banning Huawei phones in the US. If tomorrow any non-US tech company becomes too powerful, the US just has to play the so-called national threat card," a veteran industry representative from the Internet of Things sector based in Shenzhen, South China's Guangdong Province, told the Global Times on Wednesday. 

While US influence in the high-tech sector is omnipresent, the tech cold war has officially become a malignant competition for technology, which puts the spirit of contracts and free market competition behind politics, said Chinese analysts. 

However, industry analysts predict that the impact of this cut-off will be limited as the previous contract signed between Huawei and Arm allows the former permanent access to the Arm v8 structure, so the development of new Huawei gadgets will not be affected.

"We've also received a notice that HiSilicon will launch a new Kirin chipset on May 30, which shows its operations are all normal now," Fang Jing, an industry analyst at China Merchants Securities, told the Global Times on Thursday. 

According to its contracts, Huawei is not losing critical access to the Arm instruction set, which will ensure that HiSilicon, the semiconductor division of Huawei, can continue to develop on existing architecture. 

Huawei founder Ren Zhengfei told a group interview on Thursday that the suspension of cooperation with Arm has "no impact" on the company, as it has gained permanent access to Arm's architecture, according to media reports. 

Since SoftBank, parent company of Arm, is seeking the approval of the US government for a possible merger between its affiliate Sprint and T-Mobile, Arm is likely to yield to US pressure, he said.

"It's time to show how capable HiSilicon really is and test the real Chinese innovation spirit," Fang Xingdong, founder of Beijing-based technology think tank ChinaLabs, told the Global Times on Wednesday.

Conflict over global tech 

The US is not slowing down its crackdown on Chinese companies as it is mulling sanctions on more Chinese tech firms, which is likely to be a major conflict over the future of tech, said analysts. 

The clampdown on Chinese tech firms also cast a shadow on the resumption of China-US trade talks. 

"Trade talks can be meaningful only when the two sides show sincerity," Lu said, noting that the US crackdown on Chinese tech companies with political motives has seriously affected global tech cooperation, which will not create a sound environment for further negotiations.

The Trump administration is reportedly considering cutting American technology to more tech firms such as Megvii, a Beijing-based artificial intelligence provider, after the US added Hikvision to its export control list. 

"It sets off the new phase for the disorder of global tech competition, which will lead to the collapse of the current global cooperation in high technology," Fang Xingdong said. 

While the confrontation might replace collaboration, the growing pressure has made China's technology self-reliance much more urgent, as industry representatives are calling for more efforts to develop core technologies such as CPUs and software. 

"The US sanctions set an alarm for the domestic ICT industry, which will accelerate the development of homegrown technologies," Fang Jing said.