Taipei Times (TT): Can you tell us about Arm Intellectual Property Products Group’s latest joint venture in China?
Rene Haas: We talked about the JV [joint venture] last year. A year later, the JV is now operational, starting in April. It is a joint venture between HOPU Investment Management Co (厚朴基金) and Arm. HOPU owns 51 percent and Arm owns the remaining 49 percent. The intent of the JV is the same today as it was when it started: to create a company essentially China majority-owned.
The JV will ultimately be able to develop products specifically for the China market. At the same time, there are the partners for Arm selling our existing products in China.
HOPU is a private equity fund. There are a number of outside investors who HOPU has brought in.
TT: What kind of new technologies does Arm China plan to develop for the Chinese market?
Haas: The company is still working through the roadmap now, but some of the big initiatives for China are in the area of Internet of Things [IoT], like smart homes and smart cities.
Also, I think there will be [technologies linked to] automotive, autonomous cars, self-driving cars, etc.
TT: Would Arm China consider licensing its technologies to companies outside of China? Would the licensing fees for Chinese companies differ from those for companies from other nations?
Haas: The JV is the exclusive licensing channel for all of Arm’s technologies, or the technologies that it develops for China. The JV has the ability to design their own products, and those products will be sold back to China.
However, Arm has the sole right to license the products to partners outside China. So, it is sort of a two-way arrangement. We have products developed in the UK that go to the JV [which] can be licensed to the China partners [via Arm China], and when the JV develops its products, we can license it back.
The company [Arm China] is independent. We cannot detect the pricing between the two companies.
However, we work very hard with the JV to make sure that our global business model is maintained.
TT: Is there a schedule for Arm China’s initial public offering?
Haas: The intention is for the company to go public, but there is no timeline.
TT: How would the trade tension between China and US affect China’s ongoing push toward becoming a key global semiconductor player by 2025? What is your observation?
Haas: China is very public about its initiatives in 2025 [“Made in China 2025”]... The trade tension is re-enforcing that they need to do that. When we set up the JV, we felt it will be important to have a locally owned IP [intellectual property] company that could be used by the China government and China’s local companies that have been providing local products.
I think the initiative inside China [would] move toward becoming more indigenously controllable. I actually felt our JV strategy is the right strategy.
TT: Artificial intelligence [AI] is a broad market. Which segment is Arm targeting?
Haas: AI is ultimately the ability for computers to learn and for computers to become more intelligent to make independent decisions. What that means for Arm is AI will find itself in every application we talk about [and] our businesses: client [chips for mobile devices and laptop], infrastructure [chips for networking devices and servers] and embedded [chips for IoT devices and cars].
Every single one of these segments will be impacted by AI to some level... We announced earlier this year our first machine-learning dedicated processor — Project Trillium, which is a combination of dedicated machining-learning processor, along with the associated software library enabling that machine-learning processor.
The IP has been released to CPU and GPU partners. The products will become available in late 2019, depending on the speed our partners develop their products.
TT: About Arm’s server business, would the goal of seizing 25 percent market share by 2021 be maintained?
Haas: Yes. When we look at the server market, there are two kinds: classic server and networking [equipment]. With the advance of 5G, we believe, there will be more and more server opportunities, or examples in different parts of networking.
That is what we are talking about [with] computers moving to the edge. It does not mean so much that your cellphone becomes a supercomputer, but all of the work that was done in the cloud starts to move closer to edge devices. That can mean a router, or a base station, or other piece of equipment.
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