Chip Design Firm Arm Transfers All Shares in Chinese Joint Venture

According to Nikkei Asia, British chip design firm Arm has transferred shares in its Chinese joint venture Arm China, to a firm jointly held by Arm and Japan’s SoftBank Group Corp., in a move that may speed up its plans to go public. After the move, Arm will continue to hold equity of Arm China through the company, and the transferred company will not have the purpose of issuance.

Arm said in a statement that the move would not have any impact on Arm’s ecosystem in China. Additionally, the IP licensing agreement and profit model between Arm and Arm China will remain unchanged. Arm China will continue to be the main commercial distributor of Arm’s intellectual property (IP) in China.

In 2021, the share prices of Chinese concepts stocks heavily favored by Softbank, including DiDi, Alibaba and other tech companies, plummeted, causing the market value of stocks to shrink. As a result, Softbank CEO Masayoshi Son faced dual pressures of lower profits along with higher assets and liabilities. The main reason behind SoftBank’s eagerness to list Arm is that it has become the core asset that SoftBank can trade for money.

Arm is a global leading provider of semiconductor IP, mainly engaged in chip design and IP licensing, providing the underlying architecture and chip “power” support for mobile device processors of Apple, Samsung and Qualcomm, and is currently the enterprise with the largest market share in the field of chip IP. In 2016, SoftBank bought Arm for $32 billion and privatized it from the New York Stock Exchange.

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Arm China is a joint venture company established by Arm in China in 2018, and it is also the only licensed platform for Arm’s technology IP in China. Its partners include Alibaba, UNISOC and Huawei, which are extremely important to China’s chip semiconductor industry. As the largest single shareholder of the joint venture company, Arm holds 47.33% of equity in Anmou Technology.

At present, negotiations between SoftBank, Arm, Arm China and other parties are continuing, including the introduction of new shareholders and board members, which are still in progress.