SoftBank-Owned Arm Faces China Roadblock After Nvidia

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  • SoftBank Group Corp's SFTBY SFTBF U.K. chip designer Arm Ltd's escalating battle at its renegade China unit has jeopardized its IPO ambitions, the Financial Times reports.
  • The joint venture head, Allen Wu, has launched a third legal case against Arm China through one of his shareholder companies. Wu's latest case aims to get reappointed to the Arm China board. 
  • It marks Wu's latest effort to maintain control over the crucial business unit and risks disrupting SoftBank chief Masayoshi Son's U.S. listing ambitions for Arm. 
  • Arm China has historically contributed around a fifth of Arm's overall sales.  
  • Arm's planned merger with NVIDIA Corp NVDA collapsed this week amid political and regulatory resistance in the U.S., U.K., and Europe. 
  • Arm's struggle to regain control of its J.V. in China has dragged on for almost two years. 
  • Arm warned in January that it was unable to verify Arm China's revenues due to the dispute. 
  • A lack of clarity over a critical business unit's financials and legal battles in a notoriously hostile chip market potentially makes it difficult to value Arm's business. 
  • Price Action: NVDA shares traded lower by 3.3% at $258.24 in the premarket on the last check Friday. SFTBY shares closed lower by 5.61% at $23.37 on Thursday.
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