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Sarah Dai

UK chip designer Arm is wrestling for control of its Chinese joint venture after its decision to oust the unit’s leader was challenged publicly by Arm China this week.
SoftBank-owned Arm, which specialises in chip design software and whose clients include Huawei Technologies, said earlier this week that the board of its Chinese joint venture had agreed to remove its executive chairman and chief executive officer Allen Wu and had appointed two company vice-presidents to lead as co-CEOs in the interim.
Arm owns 49 per cent of the China venture, and investors led by Chinese equity fund Hopu Investment hold the rest.
Arm said the decision to remove Wu was taken at a board meeting on June 4 following an internal investigation that showed he “put at risk” the interests of the company’s shareholders.
“Following a whistle-blower complaint and several other current and former employee complaints, an investigation was undertaken by Arm Ltd.,” Arm said in the statement jointly issued with Hopu. “Evidence received from multiple sources found serious irregularities, including failing to disclose conflicts of interest and violations of the employee handbook.”
However, Arm China later rejected this claim and said in a statement posted on its official social media accounts on Wednesday that Wu continues to serve as its CEO and has carried out his duties in accordance with “relevant laws and regulations.”
Arm China is “an independent legal entity registered according to Chinese law”, which is currently operating as normal and will continue to serve its clients and industry partners in China, it noted.
Wu did not immediately respond to a request for comment.
“Senior management including the CEO, are appointed by the board of directors, and removal should be favoured by a majority of shareholders,” said Kenneth Zhou, a Beijing-based partner at international law firm WilmerHale. “’[However] companies incorporated in China abide by Chinese corporate laws and by-laws, and are not bound by terms applicable to their foreign parent companies.”
The power tussle has emerged at a delicate time for the company, with Arm currently caught in the cross hairs of US moves to cut off Western technology supplies to China’s dominant smartphone and telecoms equipment maker Huawei, amid US charges that the company is a national security threat.
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An Arm company spokeswoman told the Post earlier this week that Wu’s removal was effective immediately.
“Arm Limited and Hopu remain committed to Arm China, to the Chinese market, to the success of Arm’s Chinese ecosystem partners, and to ensuring that the Arm IP platform remains the best choice to support the development of the semiconductor industry in China,” Arm said in its statement.
With offices in Beijing, Shanghai and Shenzhen, Arm China has taken off in the country as an exclusive licensing channel between the UK group and Chinese companies.
“We have never cut supplies and will always support Huawei, including its product launches and ongoing shipments,” Wu told Chinese media in a briefing in September in response to growing concerns that Huawei’s suppliers could desert the company for fear of falling foul of US sanctions.
Wu, a US citizen with an MBA from the University of California, has led Arm’s China business since 2014, and became the CEO of Arm China when it was formed in 2018, according to his LinkedIn profile.
A member of Arm China’s front desk staff told the Post she did not have information about the personnel decision and messages asking for further comment did not receive an immediate response.



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Allen Wu Xiongang, executive chairman and CEO of Arm Technology (China). Photo: Simon Song

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Arm owns 49 per cent of the China joint venture, and investors led by Chinese equity fund Hopu Investment hold the rest
The power tussle has emerged at a delicate time for Arm amid rising tech tensions between the US and China and Washington’s campaign against Huawei



The power tussle has emerged at a delicate time for Arm amid rising tech tensions between the US and China and Washington’s campaign against Huawei.
