Reporting by XinZhiyuan
Edit: Good Sleepy La Yan
Two years later, Wu Xiongang, the current CEO of Arm China, was once again "fired" by SoftBank and Arm.
On April 27, according to the Financial Times, Bloomberg and other media reports, SoftBank and Arm plan to remove Wu Xiongang, the current CEO of Anmou Technology.
According to two people familiar with the matter, the two proposed co-CEOs are Dr. Liu Renchen, vice president of the Research Institute of Tsinghua University in Shenzhen, and Chen Ke, managing partner of SoftBank Vision Fund. In this regard, Anmou Technology said it would not comment.
SoftBank: Clearing the "barriers" for Arm's IPO
Since the collapse of the $66 billion acquisition, SoftBank has reopened Arm's IPO plans. However, if you want to complete this grand plan within a year, Anmou Technology seems to have become a major obstacle in the eyes of SoftBank founder Son Zhengyi. After all, if you want to achieve Arm's IPO, you first need to conduct a financial audit. The presence of the current CEO, Wu Xiongang, will greatly affect the interest of investors.
So after much deliberation, SoftBank decided to transfer the equity into a new entity. As a result, Arm's stake will be reduced from 47.3% to 10%, and the relationship between Arm and Anmou Technology will become a license agreement. As a result, SoftBank does not need to audit the financial situation of Anmou Technology for the IPO. However, some people are worried: "Without Arm, can you still call it 'Arm China'?"
Wu Xiongang: An American who has been facing Arm for two years
According to Arm, Xiong'ang Wu is a U.S. national with an MBA from the University of California, Berkeley's Haas School of Business, as well as Ann Arbor's Master of Science in Electrical Engineering and a Bachelor of Science in Electrical Engineering from the University of Michigan, and holds a diploma from the Stanford Graduate School of Business Executive Program (SEP). He joined Arm in 2004, Vice President of Sales for China in 2007, General Manager and Vice President of Sales for China in 2009, President of China in early 2011, President of Greater China in January 2013, and joined ARM's Global Executive Committee in January 2014. With so many honors and titles, it is indeed a bit suspicious of "meritorious and high-speeding lords".
In addition, Anmou Technology has a perpetual and exclusive license to market and sell Arm chips in China, and obtains a share of sales revenue. For its in-house developed intellectual property (IP), Aim Technology can earn 100% of its revenue. According to three people familiar with the matter, the intrinsic incentive of this structure also means that in practice, Wu Xiongang will sell as much of Anmou Technology's internally developed intellectual property as possible, usually by tying it to Arm's intellectual property transactions. In fact, the market demand for The intellectual property rights of Anmou Technology may not be high. For nearly two years, Arm has been trying to oust Mr. Wu, saying he ignored the board's 7-1 ouster vote and has maintained control of the company. Although he resigned, he still had the company's official seal and registration documents. This allows him to continue his day-to-day operations without regard to the interference of others. This official seal is not ordinary. Not only are the official documents authorized through this seal, but they also represent Wu Xiongang's legal representative status.
However, according to people familiar with the matter, the board of directors has the support of the Chinese government and is currently going through the process, intending to select a new representative to come out, and then register the new representative in the official database and make a new company seal. I choose a new one, communicate with the official, and the official seal also makes a new one. Can you Wu Xiong'ang still rely on it and not leave? The whistleblower said that this solution has not yet been decided, which means that there may still be variables. In fact, in the past two years, SoftBank has been negotiating with Wu Xiongang. But the negotiations have been deadlocked and little progress has been made. First, on June 10, 2020, the news came out of the dismissal of Wu Xiongang. However, Anmou Technology said that there was no such matter and no board of directors was convened.
Not long after, the public account of Anmou Technology also issued relevant clarifications.
However, the notice issued by Arm headquarters is diametrically opposed. It reads, "Wu Xiongang's actions endangered the interests involved. The board of directors believes that Wu Xiong'ang's removal is a responsible decision."
After the company's media statement was issued, Anmou Technology issued another statement, pointing out that the former's quality control was "unnecessary".
Now that I think about it, this matter may not have been simple back then. First, the board of directors appointed Pan Zhenyuan and Tang Xiaoqi as interim co-CEOs of Anmou Technology. This was followed by a statement emphasizing that Wu xiongang was a "U.S. citizen." This small detail is really a bit abrupt, after all, Pan Zhenyuan, as a "Singapore citizen", is also a so-called expatriate. In general, as a global company, there is no need to emphasize the national background so much. In addition, at that time, it coincided with the increase of sanctions against Huawei by the United States, which is difficult not to be reminiscent. And the wave of operations staged in 2022 seems to be the same as in 2020.
Anmou Technology: Just ended the 4th anniversary celebration
Counting the days, by this year, Anmou Technology has also been established for four years. On June 5, 2018, SoftBank Group announced that its chipmaker Arm has agreed to sell a consortium led by Hou On Innovation Fund for $775.2 million from its Chinese subsidiary ARM Technology China to form a joint venture for Arm.
According to the information on the official website of the Ministry of Science and Technology of China, Houan Innovation Fund was established in January 2017, Hopu Investment is GP, and the LPs are China Investment Corporation, Silk Road Fund, Guoxin Company, Temasek Company, Shenzhen Industry Group, etc. According to the information of Tianyancha, the major shareholder of Anmou Technology is Arm, holding 47.33% of the shares, followed by Amber Leading (Hong Kong), holding 36%, and Ningbo Meishan Bonded Port Area Anchuang Growth Equity Investment Partnership holding 13.3%.
Needless to say, Arm is still very successful in licensing chip technology. Arm estimates that in the year of 2017, about 95 percent of all advanced chips designed in China were based on technology provided by Arm. For the fiscal year ended March 2018, Arm's semiconductor technology IP business in China accounted for about 20% of Arm's total revenue. It is not difficult to find that the Chinese market is unique and valuable compared to the rest of the world. Arm believes that the joint venture to license Arm semiconductor technology to Chinese companies and develop Arm technology locally in China will help expand Arm's opportunities in the Chinese market. No, April 23 just completed the celebration of the fourth anniversary of Anmou Technology.
Officials said that in the 4 years since the establishment of Anmou Technology, the overall revenue has risen by 250%. There are more than 800 employees in total in the country' north, Shanghai, Shenzhen and Chengdu. More than 80% of them are still high-end R & D personnel. The technical research and development team of this scale is not to be described as strong. At present, there are more than 300 authorized partners in China, and the cumulative shipment volume of chips of these partners has exceeded 25 billion. Moreover, in the past four years, the chip products launched by Anmou Technology are really many. There are names with very ancient styles, such as "Zhou Yi" NPU, "Xingchen" CPU, "Shanhai" CPU, "Linglong" ISP, VPU processor and so on.
The number of related patents is almost 300. Anmou Technology officially predicts that the revenue of self-developed business in 2022 will exceed 700 million yuan. As for who will eventually become CEO, it will depend on how it develops further. Let the bullets fly a little longer.
Resources:
https://www.bloomberg.com/news/articles/2022-04-27/softbank-and-arm-move-to-retake-control-of-china-jv-oust-ceo
https://www.ft.com/content/04267443-9b39-4ce3-a7da-65a726fddfdc
https://www.ft.com/content/19acf507-0d8a-424e-b35e-405e2f613ae0