Arm is reportedly working to sidestep its subsidiary, Arm China, by directly offering IP licenses to Chinese customers, which has already led to increased tension between the two companies, reports DigiTimes. While Arm has not confirmed this, the move would mark a departure from previous tactics in China and reflects strains in the relationship.
Arm Holdings formed Arm China in 2002 and until 2016 it was a wholly owned foreign enterprise. In 2016, Arm sold a 51% stake in the company to a local investor consortium consisting of state-controlled China Investment Corp. and the Silk Road Fund in a bid to address strict regulatory requirements, concerns over technology transfers, and develop China-specific products to better address one of the world's largest markets. As a result, Arm China became an intermediary earning a margin from sales of Arm's IP to customers in China.
