Apr 07, 2022 03:36 AM

China Venture Deal Poses Uncertainties to Arm’s Licensing Income

Arm Ltd. aims to go public in New York next year.
Arm Ltd. aims to go public in New York next year.

SoftBank-owned Arm Ltd.’s transfer of its stake in its wayward China joint venture may expose the British semiconductor design giant to the risk of losing some of its licensing income from the unit, analysts warned.

Arm shifted its 47.3% holding in Arm China to a special purpose vehicle that it jointly owns with SoftBank Group Corp., the company’s spokesperson told Caixin April 1. Arm will continue to own the stake indirectly, and its licensing agreement with the Chinese firm will remain intact, the company said.

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