SoftBank Group-backed Arm Ltd. clashed publicly with its Chinese joint venture over the unit’s leadership, shedding rare light on a power spat within the British computer chip designer, reported Caixin.
In a statement made on Wednesday, Arm said the board of its China joint venture Arm China agreed to remove Chairman and Chief Executive Officer Allen Wu. Arm owns 49% of the China venture, and investors led by Chinese equity fund Hopu Investment hold the rest. However, Arm China issued a separate statement hours later saying Wu was still in charge and the venture was operating normally. The parent then fired back in a joint statement with Hopu accusing Wu of conflicts of interest and violations of employee rules.
The controversy comes at a sensitive time for Arm and its Chinese affiliate, with Western companies struggling to navigate an escalating clash between the US and China over technology leadership. Arm, whose semiconductor designs are used in the majority of the world’s mobile devices, is among the enterprises grappling with the uncertainty of growing tensions.
Multiple sources told Caixin that Arm and Chinese shareholder Hopu have expressed concerns over Wu’s excessive power in Arm China. They were disturbed by Wu’s moves to set up new facilities and business partnerships without adequate disclosure to shareholders. Wu also set up an investment fund privately without the board’s knowledge, triggering fears over conflicts of interest.