Biden's trade war with China threatens our business, army warns

Joe Biden has imposed sanctions on China to limit its access to the most advanced computer chip technology. Credit: SAUL LOEB/AFP

Arm has warned that President Joe Biden's trade war with China will hurt revenue as the British chip maker unveiled $70bn (£54bn) listing plans in New York.

Growing tensions between Beijing and the West are already hurting businesses, Arm said, and could intensify as governments tighten restrictions on investment in artificial intelligence and other high-tech products.

Geopolitical risks threaten to overshadow Arm's long-awaited stock offering , which was announced on Monday.

As part of its 330-page IPO announcement, Arm said nearly a quarter of its sales are in China, making the business «particularly exposed to the economic and political risks» that affect the country.

The Japanese-owned Cambridge-based company SoftBank, develops semiconductor designs used by the world's tech companies in billions of smartphones and similar devices.< /p>

Risks in the sector have increased since President Biden imposed sanctions on China designed to limit its access to the most advanced computer chip technology .

China's Semiconductor Manufacturing Equipment Imports by Country

Arm said sales are handled by divisions including Arm China. fell $28 million in the three months to June, including a $12 million decline in royalty revenue that the company blamed on U.S. «trade protection and national security policies» that affected China's «semiconductor suppliers and customers.»

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In December, Chinese tech giant Alibaba was banned from buying Arm Neoverse chips after the UK and the US said the technology could be used for military purposes against the West.

Trade sanctions caused imports of Chinese chips to fall by 18%, according to customs authorities, during the first year during the first year.

Potential internal disputes could also pose a problem for Arm in China, Monday's prospectus said.

Arm China is an independent company owned by SoftBank , which licenses the Arm brand and sells chips to local customers.

Arm China recently experienced a long power struggle after local boss Allen Wu refused to step down despite being fired in 2020. .

This dispute ended last year after Wu's possible departure, although the company warned investors of potential shortcomings in family relationships.

«If these commercial relationships no longer exist or worsen, our ability to compete in the PRC market may be materially and adversely affected,” the message reads.