Analysis: Arm IPO filing reveals depth of Chinese risk

By Peter Clarke, eeNews Europe
August 22, 2023

The filing for an IPO in intellectual property licensor Arm has revealed details of problematic relations in China and risks to its continued business there.

A key factor is that after Arm stages its IPO it will still be SoftBank Group that retains the largest stake in Arm Technology (China) Co. Ltd. which is the gateway to Arm’s China revenues. And SoftBank Group and Arm together only hold a 48 percent interest in the Arm China.

Several years ago, Arm – presumably under pressure from the government of the People’s Republic of China – opted to cease having a wholly- or majority-owned subsidiary to manage licensing and royalty collection. In a series of manoeuvres Arm was moved into a minority ownership position in Arm Technology (China) Co. Ltd.

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