Reports: ARM China makes independent move in autonomous driving
The company, which is at the centre of a long-running row with its parent, SoftBank Group-backed ARM Ltd., held a launch event on Thursday August 26, the reports state. One observer said that ARM China had gone “completely rogue” and was operating as an independent company.
According to one report the firm is now saying it is not part of ARM. Another report referred to ARM China as being part of ARM but said that a sub-brand had been created to make multi-core computing units for autonomous vehicles. This would include AI and vision processing cores. The sub-brand would be used for locally and independently developed IP cores and ARM China would be able to supply both ARM IP and its own independent IP.
ARM was approached for comment and supplied the following statement: “Arm has seen strong growth in our business as our global partners shipped more than 25 billion Arm-based chips in 2020. Of those 25 billion chips, more than 3 billion were shipped by our partners based in China. Arm continues to have a successful working relationship with the Arm China team in support of this growth, and both the structure and ownership of the JV remains unchanged since its inception in 2018.”
Nonetheless, ARM has been struggling with its minority-owned subsidiary, and the CEO it has been unable to oust – Allen Wu – for more than a year. Wu held on to the company seal for ARM China and refused to surrender it. ARM has appealed to Chinese authorities to try and help resolve the issue but apparently without success. The existence of the dispute also blights the chances for the success of the proposed $40 billion acquisition of ARM by Nvidia Corp. (see ARM’s China struggle threatens $40bn Nvidia deal).
A launch of independent IP cores for which royalties are not returned to ARM would be latest act in series of events that could effectively mark the mugging of ARM and taking away of its second largest market.
ARM China was portrayed in photography from the launch event as comprising CPU cores from ARM and so-called XPU cores that would be developed in China where the company has more than 400 staff. The IP blocks within the XPU line would include neural processing units (NPUs), security processors (SPUs), image signal processors (ISPs) and vision processing units (VPUs).
Reportedly ARM Ltd. has been denying ARM China access to its latest developments during the struggle. These allegedly include the Ethos NPU for machine learning acceleration and the ARMv9 instruction set architecture cores. However, another source said ARM Ltd. continues to deal with ARM China, provide IP to ARM China, and support customers in China.
Unless some sort of accommodation can be reached there is a risk this launch event could represent the birth of an independent IP licensor offering ARM cores in China and collecting royalties, with the possibility that chips would be shipped globally. With ARM Ltd. not having control of its subsidiary it would be hard for ARM to be sure it is getting paid its royalties in full.
ARM’s problems go back to May 2017 when the company was persuaded to form a Chinese joint venture for the creation of IP in China. Then in May 2018 ARM formed a joint venture with Chinese partners in which it held about 49 percent expressly for the purpose of collecting royalties in China. It could be said that the writing was on the wall as there were plans even then for that minority subsidiary to stage an intial public offering of shares (see Report: Control of ARM’s China business passes to JV).
ARM’s troubles escalated in June 2020 when ARM and other shareholders represented on the board of ARM China tried to sack CEO Allen Wu, alleging a conflict of interests (see ARM in struggle for control of Chinese subsidiary). Subsequently it was alleged that Wu offered discounted access to ARM’s intellectual property if customers invested in Alphatecture Hong Kong Ltd., a venture capital fund Wu had created to invest in Chinese startups.
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