Softbank Group Corp’s Arm Ltd and its Chinese chip venture yesterday clashed publicly over whether the venture’s chief executive officer had been fired, a dispute that threatens to disrupt a company central to the global semiconductor industry.
The British firm on Tuesday said that the board of Arm China (安謀中國) — jointly owned by Arm and investors including China’s sovereign wealth fund — voted to remove chief executive officer Allen Wu (吳雄昂) and replace him with a pair of co-CEOs.
Hours later, Arm China posted a statement on its WeChat (微博) account asserting that Wu was still in charge and the venture was operating normally.
The British firm then fired back to say it stood by its original statement, adding that Wu had been fired after an investigation uncovered undisclosed conflicts of interest and contraventions of employee rules.
“Following a whistle-blower complaint, and several other current and former employee complaints, an investigation was undertaken by Arm Limited,” the company said in its latest statement, jointly issued with shareholder Hopu Investment Management (厚朴基金管理).
“Evidence received from multiple sources found serious irregularities, including failing to disclose conflicts of interest and violations of the employee handbook,” it said.
The controversy came at a sensitive time for Arm and the company’s 49 percent-owned Chinese affiliate, when Western firms are struggling to navigate an escalating clash between the US and China over technology leadership.
Arm, a UK-based company whose semiconductor designs are used in a majority of the world’s mobile devices, is among the firms grappling with the uncertainty of growing tensions.
Arm said that the board had appointed Ken Phua (潘鎮元) and Phil Tang (唐效麒) as Arm China’s interim co-CEOs.
Wu did not respond to e-mails and a message sent via his LinkedIn profile seeking comment.
Arm China yesterday on WeChat said that the executive remained in charge.
“In accordance with relevant laws and regulations, Allen Wu continues to serve as chairman and CEO,” the post read.
Softbank in 2016 acquired Arm for US$32 billion in one of its largest acquisitions, a deal intended to further Softbank founder Masayoshi Son’s ambition of creating a global Internet of Things ecosystem.
Arm China was formed in 2018, when Softbank sold 51 percent of the subsidiary to a consortium that included China Investment Corp (中國投資), the Silk Road Fund and Singaporean state investment firm Temasek Holdings Pte.
It operates offices in Shenzhen, Beijing and Shanghai, and acts as an intermediary between Arm in the UK and clients, such as Huawei Technologies Co (華為), in the world’s largest smartphone market.
Arm licenses the fundamentals of chips for companies that make their own semiconductors and also sells processor designs.
Most of the world’s smartphones depend on Arm’s technology, and it is trying to expand into servers and PCs.
The company has been ensnared in Washington’s campaign against Huawei because of its central role in semiconductor architecture.
That conflict escalated after Washington last year prohibited the sale of US software and circuitry to Huawei, a key Arm client.
The British company has said it would comply with the so-called US Entity List restrictions.
Local media have cited Wu as saying his company would continue to work with Huawei.
Arm continues to supply technology to Huawei unit HiSilicon Technologies Co (海思半導體), but it is unclear if it can license future designs to the Chinese company.
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