UK-based chip designer ARM has told staff it must suspend all business with Huawei, according to a TV chanel.

ARM instructed employees to halt “all active contracts, support entitlements, and any pending engagements” with Huawei and its subsidiaries to comply with a recent US trade clampdown.

ARM’s designs form the basis of most mobile device processors worldwide.

In a company memo, it said its designs contained “US origin technology”.

As a consequence, it believes it is affected by the Trump administration’s ban.

One analyst described the move, if it became long-term, as an “insurmountable” blow to Huawei’s business.

He said it would greatly affect the firm’s ability to develop its own chips, many of which are currently built with ARM’s underlying technology, for which it pays a licence.

Cambridge-headquartered ARM had been described as the UK’s largest tech firm until its takeover by a Japanese fund. It employs 6,000 workers and lists eight offices in the US.

In a statement it said it was “complying with all of the latest regulations set forth by the US government”, but declined to comment further.

Huawei has issued a brief statement of its own.

“We value our close relationships with our partners, but recognise the pressure some of them are under, as a result of politically motivated decisions,” it said.

“We are confident this regrettable situation can be resolved and our priority remains to continue to deliver world-class technology and products to our customers around the world.”

What is ARM?

ARM is a chip designer founded in 1990. In September 2016 it was acquired by Japanese telecoms giant Softbank, but remains based in Cambridge, UK.

ARM does not manufacture computer processors itself, but rather licenses its semiconductor technologies to others.

In some cases, manufacturers only license ARM’s architecture, or “instruction sets”, which determine how processors handle commands. This option gives chip-makers greater freedom to customise their own designs.

In other cases, manufacturers license ARM’s processor core designs – which describes how the chips’ transistors should be arranged. These blueprints still need to be combined with other elements – such as memory and radios – to create what is referred to as a system-on-chip.

As a result, when you hear talk of a device being powered by a Samsung Exynos, Qualcomm Snapdragon or Apple A11 chip – or one in a Huawei smartphone – it is still ARM’s technology that is involved.

ARM’s US headquarters are in San Jose, California, and the firm has offices in Washington, Arizona, Texas and Massachusetts.