July 29, 2020 / 8:12 AM / 14 days ago

Arm Ltd accuses Chinese subsidiary's CEO of 'creating a culture of fear'

SHANGHAI (Reuters) - Softbank Group Corp-owned chip technology firm Arm Ltd fired back against its Chinese subsidiary in a statement on Wednesday, accusing Arm China CEO Allen Wu of “propagating false information and creating a culture of fear and confusion among Arm China employees.”

The remarks are the latest in an ongoing conflict between the two companies, which first emerged in June.

“Allen’s focus on his own self-preservation has also put China semiconductor innovation at risk as he has attempted to block the critical communication and support our China partners require from Arm for ongoing and future chip designs,” UK-based Arm Ltd said in the statement.

Arm China did not immediately respond to a request for comment.

Arm Ltd’s comments come hours after Arm China published an open letter signed by nearly 200 staff members accusing Arm Ltd of attempting to cut Arm China’s contracts with its business partners.

The rift between the two firms first became public in June, when Arm Ltd announced that Wu would be replaced as the CEO of Arm China. Immediately following that announcement, Arm China issued a statement that said Wu would remain in his position.

Arm China, generates revenue by licensing chip architecture to Chinese companies. The company was established in 2018 when SoftBank sold a 51% stake in Arm Ltd’s Chinese subsidiary, Arm Technology (China) Co Ltd, to a group of Chinese investors. SoftBank had acquired Arm in 2016 for $32 billion.

Reporting by Josh Horwitz; Editing by Jacqueline Wong

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