Economic Observer reporter Chen Yifan, Shen Yiran, and Li Huaqing, regarding the joint venture between Arm and China, on the afternoon of May 4, Arm's authorized representative replied to the "Economic Observer" via email, saying: "The joint venture has just started operation", "Our focus is to make This new joint venture is a success; developing new Arm IP and standards to empower the Chinese market and drive local innovation and growth."
"Arm will not answer all unproven market speculation." About Arm's joint venture with China The company, several recent reports said that the Chinese side will hold the controlling stake, and the joint venture company will seek an IPO in China.
Behind the joint venture between Arm and China, Arm has recently deployed a number of initiatives in China. Four months ago, Arm China adjusted its corporate structure: Arm Limited no longer directly held the equity of Arm Electronic Technology (Shanghai) Co., Ltd. (hereinafter referred to as "Amou Shanghai"), and transferred its equity to Arm Technology ( China) Co., Ltd. (hereinafter referred to as "Amou China"), formerly known as Amou Electronic Technology (Shenzhen) Co., Ltd., was established on December 21, 2016.
20 days ago, Arm Limited invested 700,000 US dollars to set up a wholly-owned trading company in Shanghai. The chairman and general manager of this company named Regos (Shanghai) Trading Co., Ltd. (hereinafter referred to as "Regos"). Graham Stephen Budd, who is also a director of ARM China and ARM Shanghai.
During this period, an investment platform associated with Arm has also been put in place. On March 20, 2018, Anmou Investment Management Partnership (Limited Partnership) in Ningbo Meishan Bonded Port Area was registered and established. The investors of this company include several senior executives of Arm China.
Earlier, Arm had completed the layout of the startup accelerator field in China. In Beijing, Shanghai, Chongqing, Nanjing and other places, it has established a wholly-owned "Anchuang Space" company.
As one of the most influential chip technology suppliers in the world, Arm is ushering in a new era in China.
Amou China Architecture
The registered address of Anmou China is located at Room 201, Building A, No. 1, Qianwan 1st Road, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen (located in the Qianhai Commercial Secretary Office, Shenzhen). A reporter from the Economic Observer learned from the Qianhai e-station service center in Building A, No. 19, Qianwan 1st Road, that the so-called Room 201, Building A, No. 1, Qianwan 1st Road, does not exist, but is only the registered address of enterprises in the Qianhai area. There are 10 registered addresses that can be used, and companies that need to register can freely choose one of the 10 addresses.
In the public information, Amou China is more like a management platform.
The main body of Arm's patent registration in China is Arm Limited. According to the data on Tianyancha, Arm Limited has 3,307 patents. Among its two companies in China, Arm Limited does not have any patents under the name of Arm China, and Arm Limited, which was established in 2002, owns a patent under the name of Arm Shanghai. The copyright of the software developed by Arm Developer Suite, and Arm Shanghai holds the Arm brand.
Obviously, Arm has a long history of cooperation with China, but the real patents are still in the hands of its parent company. Han Xiaomin is the general manager of the Integrated Circuit Industry Research Center of CCID Research Institute. "In the past, the cooperation between Arm and the Chinese government was more in the form of traditional industry alliances and talent training." Han Xiaomin said. Liu Weidong, secretary general of the Semiconductor Association of Tsinghua Alumni Association and chairman of Beijing Jiuhao Electronics, is more direct: "Arm is now just a sales and technical support office in China."
Arm does not produce chips by itself, and its business model is IP licensing. In the way of intellectual property licensing, one-time technology licensing fees and royalties are charged. Arm has three authorization methods, namely processor, POP and architecture authorization. Processor authorization refers to authorizing the cooperative manufacturer to use the processor designed by Arm. The other party cannot change the original design, but can adjust the frequency, power consumption, etc. of the product according to their own needs; POP authorization means that Arm sells the optimized processor to authorized cooperation. Manufacturers make it easier for them to design and produce processors with guaranteed performance under a specific process; while architecture licensing means that Arm authorizes partners to use their own architecture, and manufacturers can design processors according to their own needs. Qualcomm, Samsung, Huawei, etc. all use chips based on the Arm instruction set architecture.
Benefiting from the rise of mobile devices, the popularity of large home appliances and automotive systems, chips based on the Arm instruction set have almost monopolized the embedded and mobile markets. According to the PPT of a business introduction in the third quarter of 2017 on its official website, as of 2016, Arm's chip technology has accounted for about 90% of the world's mobile application processors (Mobile Application Processors) market share. The company is basically composed of R&D personnel. According to the KPI in the third quarter of 2017 provided on its official website, it has 5,708 employees, including 4,677 technicians, which is equivalent to 80% of the employees are technicians.
Arm's products are divided into three categories: smartphone series, wearable series, and IoT series. The main business is divided into technology licensing, patent fees and software and services. Judging from the 2017 Q4 financial report, the revenue of the three businesses in this quarter alone reached US$520 million, of which patent fee revenue accounted for about 57% of the total revenue.
Regos, a subsidiary of Arm Limited, has just been established. This is a main trading company. The main business includes: import and export of electronic equipment, computer software and hardware, communication network equipment, office equipment, wholesale, commission agency (excluding auction), and provide related supporting services. Rental of the above equipment. The registered capital is US$700,000. What is more interesting for
incubation and investment is Arm's layout in China in recent years.
Under China's huge Internet of Things and driverless market, many industry insiders believe that Arm should step up its layout in China. "At present, Arm has a potential competitor, RISC-V." RISC-V is a completely open source instruction set that can be used for free. India has defined this instruction set as a national instruction set. "If China also turns to RISC-V, , Arm will be quite passive, it is better to act earlier." The two founders of RISC-V, John L. Hennessy and David A. Patterson, are currently working at Google, serving as the chairman of Alphabet and a researcher at Google respectively. Lin Xiao, a senior researcher at the Institute of Automation, Chinese Academy of Sciences, said that Android belongs to Google. If Android decides to support RISC-V, it will be a great blow to Arm. For this point of view, Han Xiaomin also agreed with Lin Xiao's point of view.
In fact, Arm Shanghai has already started the business layout of Arm. Since 2015, Arm has started the development process of its incubator, investment management platform and industrial fund in China. In 2015, Beijing Anchuang Space Technology Co., Ltd. (hereinafter referred to as "Anchuang Space") was established.
According to the official website of Antron Accelerator, Arm Accelerator is Arm's only accelerator in the world, focusing on an innovative service platform for artificial intelligence and the Internet of Things industry.
Anchuang has been committed to helping technology-driven innovative and entrepreneurial enterprises accurately connect ecological resources, investment institutions, sales channels, and publicity channels, and provide one-stop in-depth acceleration services; help the capital market to connect with innovative teams with the most investment potential, and tap early-stage high-quality projects ; Help large enterprises find the innovative projects they need, accelerate the implementation of projects, and become a real innovation engine; help foreign advanced technologies to be implemented in China, and domestic projects to be deployed in foreign channels, focus on international cooperation and exchanges, and promote global innovation.
Anchuang Space's Chinese partner is Thundersoft Co., Ltd. (stock code: 300496, hereinafter referred to as "Thundertec"). Thundersoft holds 40.08% of the shares, is the largest shareholder and the actual controller Zhao Hongfei.
Another shareholder with a share ratio of 20% is Shanghai Jumou Information Technology Partnership (Limited Partnership). Antron Shanghai owns the remaining shares.
Shareholders of Shanghai Jumou can be traced back to Man Kun and Yang Yuxin. Yang Yuxin is the Vice President of Thundersoft. Before that, Yang Yuxin also served as the mobile computing market manager in the Asia-Pacific region for Arm, responsible for the promotion of the Arm mobile computing market in the Asia-Pacific region.
Man Kun, through its wholly-owned Shenzhen Anchuang Technology Investment Management Co., Ltd. (hereinafter referred to as "Anchuang Investment"), jointly invested in Shanghai Anmu Information Technology Co., Ltd. with Yang Yuxin, and Yang Yuxin invested together with Shanghai Anmu Information Technology Co., Ltd. Shanghai Jumou Information Technology Partnership (Limited Partnership).
According to Tianyancha data, Beijing Anchuang Space Technology Co., Ltd. has invested in 17 companies, including startup space companies in Beijing, Shanghai, Shenzhen, Nanjing, Chongqing and other places.
At the conference of the establishment of the Antron Space Accelerator in September 2015, Wu Xiongang, the global executive vice president of Arm and the president of Greater China, commented on the mission and business model of the accelerator, "Accelerators will have diversified flexibility in terms of business models. The focus is on Arm's strong ecosystem, which can be supported by industry partners as one of the business sources of accelerators, and at the same time, it can also flexibly launch products through equity, product sharing, and service fees, and also provide accelerators. It itself provides a space for the growth of the business model." The
aforementioned Mankun's wholly-owned Anchuang Investment plays a key role in the investment layout of the Anchuang Department.
Anchuang Investment manages multiple investment platforms, including Shenzhen Anchuang Technology Equity Investment Partnership (Limited Partnership); Ningbo Meishan Bonded Port Area Anchuang Growth Equity Investment Partnership (Limited Partnership) (hereinafter referred to as "Anchuang Growth"), Ningbo Meishan Bonded Port Area Anchuang Win-win Investment Management Partnership (Limited Partnership) (hereinafter referred to as "Anchuang Win-win") and Ningbo Meishan Bonded Port Area Anmou Investment Management Partnership (Limited Partnership).
Among them, the largest is Anchuang Growth, a partnership company registered on September 4, 2017, one of the funders can be traced back to Kaihua Real Estate (China) Group Co., Ltd. (hereinafter referred to as "Kaihua Real Estate" ). Kaihua Real Estate invests in Anchuang Win-win through Shenzhen Guochuang Kaiyuan Investment Center (Limited Partnership), which is indirectly controlled. On March 27, 2018, Anchuang Win-win increased its capital to 480 million yuan. Anchuang Win-win is one of the sources of funds for Anchuang's growth, but the investment amount has not been disclosed.
Antron's investment platform also includes Arm China executives. This platform is Ningbo Meishan Bonded Port Area Anmou Investment Management Partnership (Limited Partnership). According to Tianyancha, the partnership established on March 20, 2018 was basically funded by senior executives of Arm China.
The layout of the joint venture logic
Arm China does not stop there.
In mid-2017, he began to seek to set up a joint venture in China. He received consultation from the Arm China team. An analyst who did not want to be named said that the attitude of the other party at that time was "hoping to form a deeper cooperation model than usual". It was planned to set up a fund company in China to invest in Chinese companies, and this was considered as two planned options.
Regarding the latter plan, analysts said that from the experience of foreign technology companies that they have learned before, there are not many cases of acquiring companies through funds established outside the system, and most of them use the method of direct acquisition of companies.
Regarding the plan proposed by Arm at that time to establish a joint venture, some analysts said that this would become one of the channels for China to obtain Arm's core technology. In this regard, Han Xiaomin, general manager of the Integrated Circuit Industry Research Center of CCID Research Institute, believes that in terms of the position of Arm in the industry chain, it is unlikely that Arm will deeply open its core technologies to China through joint ventures. Lin Xiao, a senior researcher at the Institute of Automation, Chinese Academy of Sciences, also believes that Arm, as a provider of instruction sets and architectures, acquires this technology through joint ventures and has no necessary connection to improving China's chip capabilities.
According to an article on the official website of the Ministry of Science and Technology of China, on January 24, 2017, China Investment Corporation, Silk Road Fund, Singapore Temasek, Shenzhen Shum Yip Group, Hopu Investment and Arm Company jointly initiated the establishment of the Houan Innovation Fund, which was officially launched in Beijing. According to the article, the Houan Innovation Fund is managed by Arm, the world's leading semiconductor intellectual property provider, and Hopu Investments, and settled in Shenzhen. The fund will combine Arm's global industrial ecosystem and focus on investing in technology companies with potential in key areas such as mobile Internet, Internet of Things, and artificial intelligence.
On May 14, 2017, Arm and China Houan Innovation Fund signed a memorandum of cooperation in Beijing, planning to establish a joint venture company in Shenzhen. Service Platform.
According to the official website of the National Development and Reform Commission, in November 2017, the National Development and Reform Commission approved the investment of China State-owned Capital Venture Capital Fund Co., Ltd. in the HOPU-Arm Innovation Fund project in the Cayman Islands.
According to the Shenzhen branch address displayed on Arm's official website, Room 3501, Room 3501, Building 3, Kerry Construction Plaza, No. 1-1, Zhongxin 4th Road, Futian District, Shenzhen, after finding it, it is a door sign of Arm Electronic Technology (Shanghai) Co., Ltd. company. After the reporter entered the office area, a staff member said that he would not accept the interview, "You are in the wrong place." The reporter found that there was a sign of "Qianhai Hopu Technology Equity Investment Management (Shenzhen) Co., Ltd." in the office.
On May 3, the reporter came to the office address of Hopu Investment Management Co., Ltd. in Beijing Financial Street to inquire. A staff member of the company said that the company had no official website and did not accept media interviews.
Regarding this joint venture, Han Xiaomin believes that based on the in-depth cooperation in underlying technology and personnel training, as a systematic project, it can help the field of China's autonomous and controllable servers. This time is different from the original intention of market sales in Sino-foreign joint ventures. mode.
As for the news that the Arm China joint venture company plans to IPO, it coincides with the beginning of the unicorn IPO policy in China. From the perspective of capital return, "if it is true, the split of the Chinese business will greatly benefit SoftBank and Arm." Liu Weidong said in an interview with reporters on May 3. At present, Arm's share in the Chinese market is almost monopolized, and there is no need to expand its market share by establishing a joint venture in China.
In July 2016, Japan's SoftBank announced the acquisition of Arm for £24.3 billion. Many analysts said that the acquisition of Arm to enter the Internet of Things was a "big gamble" by Sun Zhengyi. The reporter sent an email to SoftBank to inquire about the relevant situation, but as of press time, no reply has been received. SoftBank’s mailbox responded automatically to indicate that its office was closed from May 2 to May 6, and mail processing began on May 7.
Regarding the topic of the joint venture, a person from a public relations company authorized to represent Arm told this newspaper: "The shipments of chips equipped with Arm IP by Chinese partners have increased by more than 110 times in 10 years."
"The Chinese market is not only very large, but also has its own Unique and very different from the rest of the world. In order for Arm technology to benefit more local Chinese companies, we need a Chinese partner to develop Arm compatible technology that can be locally licensed in the Chinese market. At the same time, Chinese companies are also more Tends to buy technologies fully developed by Chinese companies, so through the establishment of the Arm China joint venture, solutions will be tailored to suit the Chinese domestic ecosystem based on Arm’s semiconductor intellectual property (IP) and provide Chinese partners with better A broad technology portfolio to meet the needs of the Chinese market. The joint venture is committed to providing localized support for the Chinese market and local innovation, expanding the market and providing more opportunities.”
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