SoftBank chip company Arm fired its China CEO for starting a competing fund
- Allen Wu, head of Arm’s Chinese venture, established a fund called Alphatecture whose aim is to invest in companies that use its chip technology
- That move put Wu in direct competition with his employers, which is an allegation that Arm China said was ‘inaccurate and misleading’
Arm, the chip design company owned by SoftBank Group Corp, ousted the head of its Chinese venture after discovering that the executive had set up an investing firm that would compete with its own business in China, according to people with direct knowledge of the decision.
Arm Technology (China) Co chief executive Allen Wu established a fund called Alphatecture whose aim is to invest in companies that use Arm technology, said the people, who requested anonymity discussing a personnel decision.
It is common – and legal – for semiconductor companies to use investment divisions to provide financial help to fledgling companies that cannot otherwise afford their typically pricey components. But the problem in Wu’s case is that Arm, along with partner company Hopu Investment Management Co, which together own Arm China, already have one of these funds. Wu’s move put him in direct competition with his employers, the people said.
The tussle between Wu and British firm Arm is playing out against the backdrop of escalating tension between China and the US over leadership in key technologies. Arm, whose semiconductor designs underpin most the world’s mobile devices, relies on Chinese companies including Huawei Technologies for a large portion of its global revenue, and leans on Arm China to help it conduct business in China, the world’s biggest smartphone market.
Arm China called the allegations against Wu’s fund “inaccurate and misleading”.