LONDON — With China looking to bolster its own semiconductor industry and reduce dependence on foreign technology, microprocessor IP firm Arm Holdings confirmed last week that its separate local joint venture entity, Arm mini China, started operations to license its technology locally in China.

This move effectively completes a process of technology transfer to its Chinese operation enabling local chip developers to license its technology directly in China.

The U.K.-headquartered parent Arm had already announced intentions to establish the joint venture in China in February 2017, following the launch of the HOPU-Arm innovation fund. Backed by investments from a leading Chinese sovereign wealth fund and Chinese investment institutions and companies, it stated at the time its aim to invest in emerging technology companies and startups in China to accelerate development of applications in IoT, autonomous vehicles, cloud computing, big data, and artificial intelligence (AI).

Now, according to reports last week in the Nikkei Asian Review and the Chinese online site The Paper, Arm mini China has officially been registered in Shenzhen, China, with 51% being Chinese-owned (with investors including Bank of China and Baidu) and the remaining 49% owned by Arm. The reports also state that Arm mini China plans to IPO with a listing in China, which could be rapidly approved by the Chinese regulator.

EE Times asked for an interview with a senior executive at Arm to elaborate on the development, but the company’s spokesperson was only able to respond with a formal statement saying that it doesn’t respond to press speculation but confirming the JV. The statement said that Arm chip shipments by Chinese customers have grown by more than 110 fold over the past 10 years. 

To make Arm technology available to more companies within China, the company needed a Chinese partner to develop Arm-compliant technology that could be locall licensed in the Chinese market, the statement said.

"Chinese organizations prefer to acquire technologies that have been fully developed by Chinese companies with this JV’s establishment, which will enable Arm-based semiconductor intellectual property to be tailored for the Chinese domestic ecosystem and makes a broader portfolio of technology accessible to Chinese partners for China market needs," the statement read.  

Some in the electronics industry commented privately last week that the move wasn’t necessary, as the company could have continued as it has been doing so for many years in China. With its microprocessor intellectual property already being licensed to both Chinese and global chip manufacturers, the purpose of the separate entity is mainly addressing new Chinese chip developers and OEMs, as well as local innovation using its IP. It is thought that the parent company would also maintain exclusive rights to new IP developed in China for international markets.

— Nitin Dahad is a European correspondent for EE Times.