There has been unprecedented public interest around the conflict between ARM’s Chinese and British armies. The raider takeover of the Chinese ARM has led to a dead end: who is right and who is to blame in this situation? Since the head of ARM China (a subsidiary of ARM in China) refused to surrender and used the services of a security company to protect the headquarters from the arrival of new leaders, the head office considered such actions unlawful and announced a raider takeover.
Former director of the Chinese ARM Allen Wu did not want to give up his post after his dismissal through the decision of the board of directors of the British corporation ARM LTD, which in fact belongs to SoftBank Group Corp, a corporate giant in Japan.
This is probably due to several reasons:
- Firing a director, a native of China, and becoming the head of a Chinese company of a foreigner;
- Rumors and sales of all ARM (NVIDIA is now interested in selling, and is ready to buy ARM for $ 32 billion);
- ARM China generates 27% of SoftBank’s revenue from licensing ARM-based architectures;
- Selfish goals pursued by the director of a Chinese company.
Guesses about the latter are not taken from the ceiling. This, as it turned out, is one of the main reasons why management implemented the merger of the company’s CEO in China. Unconfirmed information said that Allen started his own company, which made big money on China ARM.
Local media immediately began investigating why Mr. Wu took this step. His dissatisfaction is natural. But, is this really a raider takeover and there is a chance to leave the ARM “daughter” for Allen Wu?
It turns out that there really is a chance. Legally, ARM LTD and SoftBank have a strong enough position to keep the Chinese subsidiary in check. Two years ago, in order not to get sanctions from the EU, a controlling stake in ARM China was transferred into the hands of Chinese institutions. The ARM architecture and cores can be stamped with a native license by this company on its own.
In fact, the director of China ARM can conduct business independently without asking permission from ARM LTD.
Both divisions found themselves at a crossroads, desperate to find a joint solution and asked through a social network to help resolve the Beijing issue. The British company puts China in an awkward position. If the authorities decide which side to support, it will show which market they are for: free or authoritarian. The central authorities of China have not yet issued an official comment on the event. But there is a comment from ARM China shareholders:
“The top of ARM China is intertwined in working relations with government agencies, so the conflict that has arisen needs to be resolved peacefully in order to deter the raider director from further actions that harm and destroy the company, suppress the regular work of partners and employees who want to move forward.”
Not all shareholders approve of this behavior of the head of the Chinese ARM. She supported ARM’s mother, head of the company, and, by extension, ARM investor Hopu Investment in this difficult event.
Where this confrontation will lead and how it will affect the integrity of the company remains open to question. We are waiting for an official response from China and continue to follow the news.