SoftBank chip tech firm Arm says China joint venture CEO fired for ‘serious irregularities’

The controversy comes at a sensitive time for British firm Arm amid an escalating clash between the US and China over technology leadership

Arm continues to supply technology to Huawei, which runs chip design unit HiSilicon

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Allen Wu, who recently served as executive chairman and chief executive of Arm Technology (China), is seen speaking about the company’s artificial intelligence platform, Zhouyi, during the 5th World Internet Conference held in Wuzhen, in eastern China's Zhejiang province, on November 7, 2018. Photo: Simon Song

Published: 7:54am, 10 Jun 2020Updated: 7:51pm, 10 Jun 2020

SoftBank Group Corp’s Arm and its Chinese chip joint venture clashed publicly on Wednesday over whether the venture’s chief executive had been fired, a dispute that threatens to disrupt a company central to the global semiconductor industry.

The British firm said on Tuesday that the board of Arm Technology (China) – jointly owned by Arm and investors including China’s sovereign wealth fund – voted to remove chief executive Allen Wu and replace him with a pair of interim co-chief executives.

Hours later, Arm China posted a statement to its official WeChat 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 violations 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. “Evidence received from multiple sources found serious irregularities, including failing to disclose conflicts of interest and violations of the employee handbook.”

Allen Wu, the former executive chairman and chief executive of Arm Technology (China). Photo: Weibo

The dispute comes at a sensitive time for Arm and its 49 per cent-owned Chinese affiliate, when Western companies are struggling to navigate an escalating clash between the US and China over technology leadership.

Any prolonged conflict could also have ramifications for Arm, whose semiconductor architecture underpins most of the world’s mobile devices. The British firm relies on major Chinese companies like Huawei Technologies for a large portion of its global revenue, and leans on Arm China to help it conduct business in the world’s biggest smartphone market.

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