Being a family member, tension is escalating within ARM Limited, the world-renowned smartphone chip design firm. This tension stems from the position of CEO for the Chinese branch when ARM China said it had fired one of the two candidates selected by the parent company in the UK to run the unit.
This is the second time in two days that the Chinese branch of the company publicly confronted the parent company over the management rights of ARM China. It is noteworthy that this dispute occurred just weeks after Washington tightened sanctions on Huawei Technologies, the company’s largest customer in China.
Although Kirin smartphone chips are designed by Huawei, they are all based on the original CPU designs of ARM Limited. Therefore, when the US government tightened the technology export control requirements for Huawei, not only did the company’s order of chip processing be cut off, but even the ability to cooperate with ARM to design. Huawei’s chips are also affected.
Earlier, on Wednesday, ARM Limited said that ARM China CEO Allen Wu was dismissed. “because of serious disagreements“and will be replaced by the two Phil Tang and Ken Phua.
But in a post on WeChat on Thursday, the Chinese subsidiary said: Tang was dismissed from the company on May 26, “because of serious disagreements“and”will no longer represent ARM China“in any form. The company adds that they have”conducting legal procedures to protect CEO Wu and the reputation of ARM China. ”
In an earlier post, ARM China also denied ARM Limited’s role in firing Mr. Wu by saying “ARM China is an independent and legally recognized entity in China. In accordance with all rules and regulations, Allen Wu will continue to assume the role of Chairman and CEO. ”
ARM Limited, meanwhile, said the decision to fire Mr. Wu received support from Hopu Investment Management, one of ARM China ‘s investors and a well-known Chinese venture capital firm.
Many sources at CaixinGlobal said that the conflict between ARM Limited and Hopu and Mr. Allen Wu stemmed from outrageous moves such as establishing new facilities and partnerships without informing shareholders. the intention to set up a private investment fund without notifying the board of management, causing concerns about conflicts of interest.
Why is there this dispute?
The complexities in operating ARM China started two years ago, after SoftBank – the owner of ARM Limited – decided to relinquish control of ARM China. The group sells 51% of ARM China to Chinese investors, including Hopu, as well as Chinese state-backed funds such as Silk Road Fund, China Investment Corporation, and Shum Yip Group of Shenzhen government.
This is seen as an important victory for Beijing in ensuring critical semiconductor technologies, as ARM-based chips have laid the foundation for nearly every mobile device in the world. .
ARM China has taken over all licenses and copyright operations in this country and they are directly responsible for negotiating with Chinese customers, including Huawei Technologies. All Huawei chip designs – including Kirin mobile chips – are based on the ARM chip and copyright designs.
However, after Huawei was blacklisted by the US, ARM decided to stop all cooperation with the company. Local media, meanwhile, frequently cited Mr. Wu’s commitment to working back with Huawei.
The company in the UK then supplied it back to Huawei, but limited it to non-US products to comply with US government regulations. It remains unclear whether the company will continue to provide its new chip designs to Huawei.
See the Nikkei Asian Review