Several key former employees from Arm Holdings Plc’s Chinese venture have started a chip design house with local government backing, adding to uncertainty in the British firm’s biggest market just weeks after it raised $5 billion in an initial public offering.
The departures from Arm China included the head of R&D, a regional head of sales and a government relations employee who is now chief executive officer of the new firm, Borui Jingxin, people familiar with the matter said. The two-and-a-half-year-old firm is backed by Shenzhen’s government and aims to raise capital and recruit engineers — including from Arm. Borui is also a major new Arm licensee and aims to devise chips for servers, said the people, asking to remain anonymous discussing confidential deals.
Arm — whose chip designs power most of the world’s mobile devices including Apple Inc.’s iPhone — is grappling with a US-Chinese conflict over technology that has uncertain implications for foreign operators. Now, several investors have told Bloomberg News they are concerned Borui could eventually divert revenue from the China venture, in part because of the uncertainty that’s surrounded the operation in past years.
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