15 Sep - Commercial Awareness - Tech
FT: https://www.ft.com/content/e605a92c-5efc-471c-bd7d-a36c7620420c https://www.ft.com/content/792fae47-8e2f-4363-99e9-176b33ccc09a
https://www.ft.com/content/c72f4ebd-3b98-4677-b688-6631a6b1cb5a
https://www.ft.com/content/257b39c4-f146-41ae-af75-dfea955ff462
Topic: Arm’s IPO from China’s angle
Arm UK owns 47% stake in Arm China
China wants to keep Arm China
China refused to process the paperwork confirming Arm China’s transfer to a new Vision Fund called Acetone, which invested in AC. There are also reports that Arm China delayed its payment to Arm UK.
Softbank wants Arm to be separated from AC because the latter is troublesome, one issue is with the CEO Allen Wu, who owns the third largest shares.
Allen Wu was in a corporate battle with Arm UK for resisting to surrender control
The chip war between the US and China escalates and Arm China plays an important role for the country’s chip industry
Since the US export restrictions were intensified, Beijing urged Arm to work closely with them. For example, deepen its cooperation with Chinese universities, research institutes, and companies.
Regardless, UK remained as US ally and did not grant approval to Arm’s licence which were required for selling its most advanced chip to China, one customer is Alibaba.
Interview question:
- What is going on in the tech industry
Arm’s IPO; US-China battle over semiconductors intensified; China relies on Arm China
- What are the challenges for China now?
Export control. China is behind in terms of its semiconductor industry, which explains its dependence on foreign import technology, such as Arm UK which has a Chinese arm in the country. US suppresses their growth by intensifying their export control, including raw materials required to manufacture the chips. The states also lobby their allies such as the Netherlands and Japan, to inhibit China’s growth.
- How does this relate to law firm?
UK and China's deteriorating relationship may hinder cross-border activities in the tech sector. Therefore, law firms with an office in China (NRF, AO) may not necessarily have active tech corporate transactions, but will probably see an increase in the commercial dept like IP rights or contentious dept like IP disputes.
US firms or UK firms with a focus on technology, venture capital, and US footprints may have an advantage. Orrick, Cooley, Wilson Sonsini, Covington, and Goodwin are five US firms that I can think of with an exceptional reputation in technology. With venture capital, Orrick has a consistent top 1 ranking on Pitchbook. UK firms with a distinguished tech practice is AO and Birds, the former has an office in Silicon Valley.
