UK-based chip technology company Arm, which was acquired by SoftBank in 2016, will give up control of its operations in China to a joint venture with Chinese partners, Nikkei Asian Review reported.
The joint venture, Arm mini China, will handle the licensing and royalties business with local partners. It started operations in April and plans to go public on one of China’s stock exchanges. It is registered in the city of Shenzhen, with Chinese investors holding a 51 per cent interest and Arm the remaining 49 per cent.
Arm, which develops processor technology, counts Apple and Huawei among its customers, along with chipmakers including Qualcomm, Broadcom and MediaTek, which licence its technology. About 20 billion chips using Arm’s intellectual property shipped in 2017.
The UK company announced a year ago it would transfer technology to a joint venture in China, Nikkei Asian Review reported.
Arm’s move comes at an important time for China, as the country takes steps to reduce its reliance on non-domestic technologies. China imports more than $200 billion worth of chips annually.
The Chinese government last week responded strongly to US trade sanctions imposed on vendor ZTE, with officials saying the ban highlights the need to accelerate the country’s already aggressive plans to become self-sufficient in core technologies such as chips.
In addition to the trade ban on ZTE, the US Department of Justice opened an investigation into whether Huawei violated US restrictions on trade with Iran. And a US national security panel blocked a number of acquisitions of US semiconductor companies by Chinese investment funds.
A chip executive based in China told Nikkei Asian Review: “With this joint venture, China expects to secure sources of technology, especially for some sensitive chips that later go into government or other security uses.”
Hopu-Arm Innovation Fund will be a key investor, while others stakeholders include Chinese sovereign wealth fund China Investment, the Beijing-owned Silk Road Fund, Singaporean sovereign wealth fund Temasek Holdings, Shenzhen government-owned conglomerate Shum Yip Group and Hopu Investment Management, the newspaper reported.