Softbank China unit CEO defiant amid dismissal
Arm Ltd, the chip designer owned by Softbank Group Corp., ousted the head of its Chinese venture after discovering 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 China chief executive officer 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’s common—and legal—for chip companies to use investment divisions to provide financial help to fledgling companies that can’t otherwise afford their typically pricey components. But the problem in
Wu’s case is that Arm Ltd and partner Hopu Investment Management Co., which together are major backers of the venture, already have one of these funds. Wu’s move put him in direct competition with his employers, the people said.
Arm Ltd, whose semiconductor designs underpin the majority of the world’s mobile devices, relies on Chinese companies including Huawei Technologies Co. 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.
As the legal representative of Arm China, Wu holds the company’s registration documents and the company seal, or stamp. Changing the legal representative requires taking possession of the company stamp —something Wu has refused to give up.