Arm has attempted to downplay an analyst’s opinion that its Chinese joint venture conducted a “heist” that damaged its prospects in the Middle Kingdom.
The heist allegation appeared in a piece by Dylan Patel, chief analyst at an outfit named SemiAnalysis. The post is titled: The Semiconductor Heist Of The Century – Arm China Has Gone Completely Rogue, Operating As An Independent Company With Inhouse IP/R&D.
The post revisits the odd situation at Arm China – known locally as An MouTechnology – which in June 2020 fired CEO Allen Wu.
Wu refused to leave his post.
Arm, the UK-based and currently-Softbank-owned chip designer, is a minority shareholder in Arm China. While it has representation on Arm China’s board and wants Wu gone, being a minority shareholder means it can’t make that happen.
Wu retains Arm China’s company chop — an item akin to a company’s official seal. Under Chinese law, possessing the chop gives Wu authority over the company regardless of its board’s intentions. Transferring possession of a chop is not straightforward so even though he’s not wanted by Arm, Wu remains in charge. Lawsuits regarding this are percolating through the courts.
Arm is not happy Wu remains in charge, and continues to engage with China’s government to explore a resolution.
Despite being under a cloud, Wu has been busy. Arm China has recently announced what it calls a “two-wheel drive A+X strategy” that will see it continue to promote and localise Arm designs and strike out to create its own processor designs.
Patel suggests that’s the “heist” because Arm China going beyond its intended activities shows Arm has lost control. And once Arm China has its own tech it could place less emphasis on Arm tech and therefore send fewer payments back to HQ. He noted:
Fair, but also, Arm China control has been taken away. Arm cannot operate in China without Arm China. That’s a hiest.
— Dylan Patel (@dylan522p) September 2, 2021
In conversation with The Register, Arm’s spokespeople claimed it is satisfied with the results produced by Arm China, and said they see nothing to worry about in the joint venture’s new strategy. On the record, Arm offered the following statement:
We also note that Softbank’s 2018 announcement of the Arm China joint venture stated: “Arm believes this joint venture, which will license Arm semiconductor technology to Chinese companies and locally develop Arm technology in China, will expand Arm’s opportunities in the Chinese market.”
That Arm China is now seeking to create a new line of business, while explicitly stating that it continues to work with Arm designs, appears not to suggest a “heist” has taken place. Rather than robbery, instead insubordination, mutiny, or rebellion.
Even if Arm China were to back away from Arm designs, it would be doing itself a disservice. The Arm ecosystem is enormous, and device makers and developers would be loath to step away from it to learn the intricacies of a new player with small market share. Dumping Arm would also deprive Chinese licensees of the export opportunities generated by global demand for Arm’s tech.
China’s desire to achieve greater technological self-sufficiency could conceivably accelerate local adoption of a new made-in-China platform by fiat — but such a decision would also stymie the Middle Kingdom’s ambition of putting big data analytics sand 5G networks at the heart of its economy in the next five years. ®
Arm dismisses suggestion its Chinese joint venture staged a ‘heist’
Source: Tagalog Best
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