7 June, 2018 - 08:20 By Tony Quested

Shrewd move as Arm chips away at Chinese market

SoftBank’s decision to sell a 51 per cent majority stake in Arm China rings no alarm bells for Cambridge where the superchip architect is growing at a rate of knots.

In fact it could be an extremely shrewd piece of business by Arm’s Japanese-owned parent.

Arm China will now be viewed as a Chinese, rather than a Japanese, company – a critical difference in the territory. Arm chips abound in Chinese products and this move will only enhance the UK company’s sales there.

The Chinese investors who bought the stake in Arm China get a great technology pipeline for a bargain $775.2 million while Arm chips will be viewed as home grown rather than UK or Japanese imports.

The most worried country should be the US as this deal will accelerate China’s unrelenting march towards domination of a range of products in which Arm chips are used – i.e. most technological devices on the planet.

The US effectively torpedoed Broadcom’s recent record bid for Qualcomm – both companies with major operations in Cambridge – because it was viewed it would be handing Asia a tech trade edge over America.

Ironically US-owned Intel and Qualcomm will now be following China’s technological progress with a keener eye than otherwise would have been the case.

China can now fast-track the growth of its entire technology industry based on owning Arm China and having access to the most sought over superchip IP in the world.

The move enhances the economic powerhouse’s ‘Made in China’ strategy to reduce reliance on foreign imports.

The smart money is now on the US to lift certain sanctions on American-based businesses selling software and hardware to China and face up to the reality of a changing technology world.

As Charles Cotton, inspiration behind the Cambridge Phenomenon books, puts it: “The world is now facing East.”

Stansted Airport is working hard to bring a direct service to China on board. Chinese investors are now backing some of the most exciting hi-tech and life science companies in the UK and Europe’s leading technology cluster.

Joint ventures and initiatives are forging historic, unprecedented links between Cambridge and China via academia and business. The scenery has been shifted dramatically on the world’s trading stage.

 

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