Huawei has previously emphasized the importance of its business relationship with the chip designer, which was acquired in 2016 by Japan's SoftBank in a $32 billion deal.
Even though Huawei builds its own chips, numerous designs it uses come from ARM, which is why analysts believe this latest development is a significant blow to the Chinese telecommunications giant.
That could be a critical blow, following this week's reported decision of US-based chipmakers Intel, Qualcomm, Broadcom and Xilinx to halt shipments to Huawei, which is the world's number two smartphone maker and a leader in telecom infrastructure and super-fast 5G networks.
In a statement ARM was quoted by the BBC as saying that it was "complying with all of the latest regulations set forth by the USA government".
ARM, if you don't know, is the ones who created the ARM architecture (in layman's terms, the design) of the chipsets themselves.
ARM of course is still based in the United Kingdom after it was acquired by Japanese giant Softbank in 2016 and its chip designs are used in most mobile processors around the world.
"We don't want to do this but we will be forced to do that because of the U.S. government".
In the United Kingdom, two of the country's biggest mobile networks, EE Ltd. and Vodafone Ltd., said that they would stop selling Huawei phones to customers who wanted 5G services until there was "more certainty about the situation". Which U.S. law enforcement has accused of violating intellectual property rights and stealing the technology of American companies.
For instance, the concrete affects the ban will have on users are perhaps not quite as serious as portrayed.
Huawei seemed determined to keep fighting against the ban, one way or another, having stated that the company has been preparing for such an outcome but this current situation might prove to be the biggest obstacle Huawei has to face to date, as the company relies heavily on the Arm IP products.
Then earlier this week the US Commerce Department announced a 90-day delay to the imposition of trade restrictions on Huawei.
That could, in turn, have a major negative impact on the overall business as Huawei is forced to scramble for alternate technology.
He said at the time an original operating system was a "plan B" and that Huawei preferred using the systems developed by Google and Microsoft.
Based on the memo, ARM seems unsure whether it falls under the USA ban, so it's possible Huawei could be granted a reprieve.
"Huawei will continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products covering those have been sold or are still in stock globally", the company said.