Arm cuts ties with Huawei, as Chinese giant pursues its own OS

In the latest development in the ever-churning Huawei news cycle, chipmaker Arm is suspending business with the Chinese vendor to comply with the U.S. restrictions.

The BBC reported Wednesday that Arm sent out a company memo that said its employees must discontinue "all active contracts, and any pending engagements" with Huawei and its subsidiaries. The memo also said that Arm's designs contained "U.S. origin technology," which it believes is affected by the Trump administration's ban.

Losing Arm's technology would be a big blow to Huawei in the smartphone sector. Huawei, currently the second-largest smartphone vendor behind Samsung, uses Arm's mobile device processors as the key element of its smartphones.

“Arm is complying with the latest restrictions set forth by the U.S. government and is having ongoing conversations with the appropriate U.S. government agencies to ensure we remain compliant,” according to Arm's statement.

“Arm values its relationship with our longtime partner HiSilicon (Huawei’s chip arm), and we are hopeful for a swift resolution on this matter.”

Last week, the Trump administration blocked Huawei from buying goods made from 25% or more of U.S.-originated technologies or materials, and previously accused the world's largest telecommunications vendor of being a spy for the Chinese government via backdoors in its telecom gear.

On Tuesday, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced it would allow some companies to continue to do business with Huawei under specific conditions. The BIS said it would issue a temporary general license (TGL) to Huawei and its 68 affiliates to authorize some U.S. telecom companies to continue to engage in export transactions with Huawei for the next 90 days, which took some of the immediate heat off of Huawei.

RELATED: Noose tightens on Huawei as chipmakers, Google distance themselves

Google had announced that it would no longer allow access to software updates for its Android operating system and apps that are used in Huawei's smartphones and tablets, but reversed course after the BIS decision was announced.

In other Huawei news, Panasonic said on Wednesday that it would stop shipments to Huawei of some of its components, according to CNBC, but that won't have as big an impact as losing Arm.

CNBC also reported on Wednesday that Huawei said its own operating system for smartphones and tablets would be operational this fall, but would only use it if the company no longer has access to Google's Android and Microsoft Windows' operating systems.