Anmou Technology ends the dispute, see how the new management team opens a new stage?

A few days ago, Amou Technology (China) Co., Ltd. (hereinafter referred to as Amou Technology) published a letter to all customers and partners on its Weibo.

The letter first thanked customers and partners for their long-term support to Amou Technology, indicating that the company’s board of directors has properly and legally resolved Amou Technology’s governance issues in accordance with the company’s articles of association and relevant laws. The letter further announced that the new co-CEOs of the company, Dr. Liu Renchen and Dr. Chen Xun, have begun to take over the operation and leadership of the various businesses of Amou Technology, and have received strong support from employees.

At this point, some disputes over the management of Arm Technology in the past two years seem to have officially come to an end. We also tried to find some clues about the new stage of Arm Technology from the information released by the new management team.

1. New management team: compliance, legal

Back on April 29, an announcement titled “Anmou Technology (China) Co., Ltd. Announces the Appointment of New Management” was officially released by the media.

The announcement stated that its board of directors passed a unanimous resolution in accordance with the company’s articles of association and relevant laws and regulations, appointing Mr. Liu Renchen and Mr. Chen Xun as the co-CEOs of Anmou Technology, and completed the industrial and commercial registration according to law. Mr. Liu Renchen and Mr. Chen Xun will jointly lead the Amou Technology team to ensure that the company operates as usual and continues to provide customers with high-quality products and services. Arm Technology will uphold its original intention, maintain close cooperation with Arm, and join hands with domestic and foreign partners to forge ahead on the road of supporting innovation in China’s technology industry.

After this announcement came out, it was also questioned by the management team of Anmou Technology at the time of its legitimacy.

However, the current management team of Amou Technology re-emphasized in the subsequent response: “The company has legally obtained a new business license and official seal. From now on, the company’s business license and seal issued on May 23, 2018 no longer have Any legal effect binding the company, any use of the repealed business license and/or seal is against the company’s will and will constitute an infringement of the company’s rights. The company reserves all the legal responsibility for such behaviors right.”

The next day, the direct or indirect shareholders holding a majority stake in Anmou Technology jointly announced that these appointments of the company were made in full compliance with Chinese laws. The announcement also emphasized that Dr. Liu Renchen had been accepted by the local government department in Shenzhen. Legally registered as the legal representative and general manager of the company, and such appointments have taken effect.

As far as we know, this appointment is a joint decision of major Chinese and foreign shareholders, not a unilateral shareholder’s behavior. The new senior management team of Amou Technology also said that today’s Amou Technology has both the strong support of Chinese shareholders and the recognition of foreign shareholders. Many partners will continue to support its layout and future development in the Chinese market. Changes in tiers will not affect its positioning and development as an independent company.

After a few days of silence, some media reported on May 7 that the new management of Arm Technology has officially assumed office and took over the management of the company.

The report pointed out that this well-known chip IP design and service company is doing its best to ensure the orderly and stable operation of the company’s various businesses during the transition period. On the morning of the same day, Mr. Liu Renchen, the new co-CEO, legal representative and general manager of Amou Technology (China) Co., Ltd. arrived at the Amou Shenzhen office in Nanshan District on time, and accompanied by internal staff, together with the office team members. The staff conducted cordial communication and exchanges to understand the business progress of the department.

In fact, prior to this, according to relevant reports, Amou Technology held an online meeting of all employees on May 6, and almost all of the company’s more than 800 employees participated in this meeting by the new management team. At the same time, the CEO Office and Management Committee of Amou Technology have been announced. The new management committee of Amou Technology is mainly composed of former management members and some old employees. More importantly, the new appointment also indicates that the new management of the company has received strong support within the company, which will further ensure the normal operation and orderly development of Arm Technology during the transition period.

It can be seen that, as a big drama in the chip industry in the past two years, the disputes of Anmou Technology have transitioned to a new stage in the most compliant and legal way, and the handover process has been completed quickly. Compared with the ups and downs of two years ago, there is less suspense, less back-and-forth, and less drama and talk about your debut, but it seems to end in the most appropriate way. The industry needs less suspense and more certainty and rules. As an upstream IP supplier in the chip design industry, Amou Technology has many customers and partners in the industry. I believe that for them, they are most happy to see the end of the dispute and return to normal.

2. Unchangeable commitment: based on local innovation, maintain independent development

In addition to the legality of the management change mentioned above, there is another point that has attracted much attention in the dispute of Anmou Technology, and that is the independent development of Anmou Technology in China.

According to the data, Arm Technology is a joint venture company signed by Chinese investors and SoftBank Group in April 2018. The company is 51% held by the Chinese side and 49% held by the foreign side, of which Arm holds 47.33% of the shares. According to relevant sources, according to the agreement signed by the two parties, Arm Technology has the exclusive and permanent right to authorize and sell Arm intellectual property products in China. At the same time, the Chinese joint venture also has completely independent independent research and development rights, and can develop CPUs compatible with Arm architecture and other processors with independent architectures, and can reverse-license them to Arm.

Taking into account the geopolitical factors in recent years and the importance of the Arm structure, this cooperation has always been regarded as a model of Sino-foreign cooperation. This also ensures the fundamentals of the domestic chip industry and avoids the risk that domestic companies have no Arm architecture available. But since the first exposure of Arm Limited, SoftBank, Hopu and the management of Arm Technology in 2020, everyone has begun to have questions and concerns about the future development of Arm Technology. For example, can Arm’s IP still authorize Chinese companies? Is SoftBank really pushing the joint venture to develop IP in China as it has always done?

In response to these problems, we found that Liu Renchen, the new co-CEO of Arm Technology, reiterated at the staff meeting on May 6 that the company will adhere to the “four unchanged” principles in its future operations:

First, the independence of Amou Technology remains unchanged. The change of the company’s legal representative and CEO is not a unilateral act of any foreign shareholder. Therefore, the so-called “some foreign shareholders take back the joint venture company” is completely false.

Second, Amou Technology’s strategy remains unchanged. The change of leadership does not affect the positioning and development of Amou Technology as an independent company in which Chinese investors hold a majority stake, and will continue to maintain independent development in the future, and continue to provide services and support for the development of related industries in China.

Third, Amou Technology’s commitment to employees remains unchanged. Regarding the Employee Stock Ownership Plan (ESOP), the company’s board of directors promised that, under the leadership of the new leadership, after the company’s smooth transition and operations return to normal, ESOP will be implemented immediately and options will be issued to existing ARM employees.

Fourth, the framework of the organizational structure of Arm Technology remains unchanged, and there is no so-called forced redeployment plan. The new leadership will continue to deepen the talent strategy, continue to attract talent, cultivate talent and make good use of talent.

Another public information, when communicating with employees in the office on May 7, Liu Renchen re-emphasized: “The change of the company’s management and board of directors has no impact on the independence and development strategy of Amou Technology. At the same time, the company’s organizational framework and The commitment to the development of employees remains unchanged. With the arrival of the new management, Amou Technology will continue to provide services and support for the development of China’s technology industry on the road of independent development and independent innovation.”

From the perspective of China’s chip industry, the importance of Arm IP supply, especially for high-performance domestic chips, is self-evident. When RISC-V was mostly only working in the IoT field, Arm CPUs, due to their mature product ecology, It has already supported the vigorous development of high-performance terminal chips such as domestic mobile phones and TVs, and has quickly entered the field of large chips such as autonomous driving, data centers, and supercomputing. Combined with the investment boom in the chip industry in recent years, there is no emerging domestic large chip company. Exception chooses the Arm architecture as the main CPU architecture, around which various scenarios are built. The commitment of the new management of Amou Technology undoubtedly broke the rumor that Arm IP was cut off and foreign capital took back Amou Technology. The failure of Nvidia’s mergers and acquisitions and the end of joint venture disputes have also made relevant chip companies more comfortable to invest in the research and development of products based on Arm architecture.

On the other hand, Amou Technology’s open letter also mentioned: “On the basis of maintaining Amou Technology’s business model unchanged (including but not limited to continuing to develop Arm IP business and developing its own intellectual property IP), we will further deepen cooperation with customers. , cooperation between partners, fully support the long-term development of Chinese ecological partners, and continue to increase investment to enrich Arm’s partner ecosystem.” From the past attention to Amou Technology, we have analyzed: self-developed IP is Important business lines of the joint venture. If only Arm IP is sold, the business and imagination space of the joint venture company will be limited. Based on local innovation, while selling Arm IP, accumulate experience and invest heavily in local self-developed IP to support the rapidly developing Chinese chip market and establish a complete local IP. supply chain, in order to obtain greater market value. This is an easy-to-see business strategy. Therefore, seeing the position of the new management, it is easier to understand the development direction of Amou Technology in the new stage, and it is inevitable to continue to adhere to local self-research.

3. The new stage: the next step to look forward to

Arm’s latest 2021 performance data shows that its revenue in 2021 will be US$2.7 billion, a year-on-year increase of 35%. Last year, the shipment of chips using Arm technology was 29.2 billion, of which nearly 8 billion were shipped in the fourth quarter, a record. Record.

20% of Arm’s revenue comes from Arm Technology, and the Chinese market has become an important growth driver. We are not surprised by this. In the past two years, large sums of money have poured into the chip market, and industry giants such as old chip companies, new startups, mobile phones, automobiles, and cloud computing have invested heavily in chip design and development. In such a hot market atmosphere, with Arm’s continuous deep cultivation in the high-performance field, Arm Technology provides corresponding Arm IP and self-developed products in a timely manner, and quickly transitions from terminals, Internet of Things and other fields to AI, automobiles, and data centers. and other emerging markets, and thus achieved good results. With the further planning and implementation of data-driven high-performance chip products such as autonomous driving, DPU, and server CPU, we believe that Amou Technology, which can resolve disputes and operate efficiently, has more opportunities in the market.

In the past few years, we have had a lot of direct communication with Amou Technology, including participating in the release of many local self-developed products. It should be said that the R&D team has a sufficient grasp of the Chinese market demand. Focusing on many key areas such as artificial intelligence, CPU, information security, and multimedia, they have launched “Zhouyi” NPU, “Xingchen” CPU, “Shanhai” SPU, “Shanhai” Linglong” ISP and “Linglong” VPU and other self-developed IP product lines, and through the “core power” brand, a series of products to market. According to the information we got at the beginning of the year, the self-developed products have been authorized to more than 100 local customers, and more than 30 customers have achieved tape-out and mass production. Overall, Amou Technology has more than 300 authorized customers in China, and its partner chip shipments have exceeded 25 billion. At the same time, we also noticed that since the release of the “Shanhai” SPU in April 2021, Amou Technology has not released new self-developed products for more than a year. After this turmoil is over, we expect this company to continue to provide competitive products and services to the Chinese market and customers.

We will also continue to pay attention to and bring the next progress of the new stage of Amou Technology.

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