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China’s regulatory authority is reportedly delaying paperwork that would allow Softbank to assume ownership of ARM China, a subsidiary of British semiconductor design company, ARM. The move comes as Chinese regulators seek to retain a connection with Arm as US trade tensions continue to escalate. China views ARM as a “must-have ally” in its chip industry, which is currently engaged in a “chip war” with the US.
ARM’s division in China has already proven to be a significant roadblock to the company’s plans to go public in the US, due to complex legal and accounting issues. The transfer of ownership to Softbank was intended to alleviate some of these problems, but the Chinese government’s reluctance to approve the transfer has caused significant delays.
Although a spokesperson for ARM has stated that the transfer of ownership to a separate venture is complete, corporate records in China show that ARM Limited UK continues to hold a 47.33% stake in Arm China. Sources close to both ARM and Softbank have said that the restructuring still requires paperwork in China, but that the delay is a minor issue that they expect to be resolved soon.
The process of disentangling ARM from ARM China began in March 2022, after Nvidia dropped its bid to buy the company outright. ARM then resorted to plans to divest Arm China and launch an IPO, which has faced additional issues including the UK government’s suggestion that it may block the move for national security reasons.
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ARM was established in the 1990s with the help of Apple and remains a critical partner to the tech giant in the design of its Apple Silicon processors. However, Apple quickly reduced its stake in ARM, and the company was subsequently bought by Softbank. The ongoing delays in the transfer of ownership of Arm China highlight the growing tensions in the global semiconductor industry, as nations seek to maintain their dominance in the field.
