Germany bolsters corporate defenses against Chinese 'predators' European officials worry coronavirus-weakened companies could be acquisition targets

Softbank is merely a middleman to help transfer IP to China

Cambridge-based Arm is the world's leading designer of mobile chips, with reported revenues of $1.8 billion in 2018.

Arm China's breakthrough is the latest evidence of Beijing's push to protect itself from U.S. bans on tech transfers by building out domestic supply chains and developing its own secure, intellectual property.

In little more than a year, Arm China has also developed infrastructure needed to make an artificial intelligence processor as well as a central processing unit -- two other milestones in Beijing's drive to build its own chip industry and buttress national security.

"The goal of Arm China is to help all Chinese chip developers and other product makers to use Chinese-controlled technologies -- not only for the domestic market but for global markets," said William Liu, Arm China's vice president of product development.

"In the future, these China-developed technologies could even become world leaders and have a say on the global stage," he added.

Arm China was formed last April after SoftBank sold a 51% stake in the company for $775 million to a consortium of Chinese investors that included sovereign wealth fund China Investment Corporation and the state-owned Silk Road Fund.

Its U.K. parent, which has a virtual monopoly on the designs of core processors used in smartphones made by Samsung, Huawei and Apple, owns the remaining 49%.

SoftBank Group, led by chairman and CEO Masayoshi Son, purchased the U.K.'s Arm Holdings in 2016, later selling a 51% stake in Arm China to Chinese investors in 2018. (Photo by Kyosuke Tomoda)

The deal was hailed by SoftBank as way for Arm to expand its Chinese business, and has subsequently gained geopolitical significance as the U.S. scrambles to curb China's technological ambitions.

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