Report: Control of ARM’s China business passes to JV

Report: Control of ARM’s China business passes to JV

Business news |
By Peter Clarke

Processor intellectual property licensor ARM, which was sold to Japan’s SoftBank Group in 2016 for $32 billion, has formed a joint venture with Chinese partners in which it will hold a minority stake, that will be responsible for collecting intellectual property royalties in the country, the report said. There are also plans for the company, known as ARM Mini China, to stage an initial public offering (IPO), the report said.

ARM Mini China is registered in Shenzhen, China and owned 51 percent by Chinese investors and 49 percent by ARM, the report said.

The creation of the joint venture would appear to be the fulfilment of a plan first mooted a year ago (see Reports: ARM agrees to create Chinese IP firm). As was reported then, Hopu-Arm Innovation Fund, also known as Hou An Innovation Fund, will be a key stakeholder in the venture, with investors including: China Investment Corp:, Silk Road Fund, Singapore’s Temasak Holdings, ARM, Hopu Investment Management and Shum Yip Group.

It seems the creation of the joint venture is the price to be paid for allowing ARM to be part of China’s rapidly developing indigenous semiconductor infrastructure and to gain access to certain government system-chip development contracts that China would insist are engineered entirely within China.

China is said to responsible for approximately 25 percent of ARM’s revenues and was probably given a choice on how to reduce the amount of money it takes of the country. This way continues to give ARM a stake in the Chinese operations while also furthering China’s national objectives of developing world class engineering and independence in semiconductors.

Related links and articles:

Nikkei Asian Review report

News articles:

China’s ARM twist underlines strategic nature of tech

Reports: ARM agrees to create Chinese IP firm

ARM VC fund formed for China

ARM-SoftBank: Selling at the top or buying at the bottom?

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