Allen Wu, the business’s chief executive and chairman, claims that the company could go public in Shanghai or Hong Kong in 2026 or later. According to him, Arm Ltd., which is poised to list on the New York Stock Exchange early next year, is expected to back Arm China’s IPO.
“We are supportive of [British parent] Arm’s IPO,” said Allen Wu in an interview with the South China Morning Post. “We hope that Arm would also support ours.”
Given that Arm Ltd. cannot undertake an initial public offering (IPO) without correctly reporting its financial results and sources of revenue to regulators (including money it receives from Arm China, which refuses to publish its books), Wu’s comment puts Arm Ltd.’s IPO at risk.
Arm China is a partnership between Arm Ltd. (now owned by Softbank) and a group of Chinese investment funds, including China Investment Corp., Hopu Investment, and the Silk Road Fund. Arm, based in Cambridge, UK, owns a 47 per cent share in Arm China, while Chinese organisations own a 51 per cent stake and control the company’s destiny. Arm Ltd can’t fire Wu because he has the corporate seals, which is why he’s known as a rogue CEO.
According to Arm China, intellectual property licencing and royalty fees make for roughly 25% of Arm Ltd.’s revenue. Meanwhile, it claims to have established a portfolio of technologies that enable it to operate independently of its parent business.
“Arm has written to Chinese authorities that Arm China won’t survive without [the British firm’s] support,” Wu told SCMP. “But Arm China has already developed the capability to continue its operations separately from Arm in the UK.”
While listing Arm China shares in Hong Kong or Shanghai when Arm Ltd. (which still has a 47 per cent ownership in Arm China) shares will be traded on the NYSE may seem unusual, it is not unheard of in China. For example, China’s largest contract chipmaker, Semiconductor Manufacturing International Corp. (SMIC), is a publicly-traded firm with many fab joint ventures with local governments and Chinese investment groups, which sometimes have a controlling position in those operations.