China's ARM twist underlines strategic nature of tech

June 01, 2017 // By Peter Clarke, eeNews

The strategic nature of technology underlies what ARM is doing forming a joint venture company to take IP to market in China

At first glance such a move seems disadvantageous to ARM and its owner SoftBank Group (see Reports: ARM agrees to create Chinese IP firm).

ARM has spent many successful years taking its processor IP to market in China in arrangements where it, via a wholly-owned subsidiary, keeps all the monies paid in upfront payments for IP, for engineering consultancy, and for royalties on chips shipped -- presumably less some tax paid locally. After all ARM is not like some multinationals. So why would it be prepared to set up new arrangements whereby a partially owned subsidiary takes ARM-originated and locally-generated IP to market in China and only passes a proportion of the money up the line.

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