British Conservative MP: The British government should take action to prevent Arm from "passing the buck"

The Financial Times recently published an article by Tom Tugendhat, a member of the British Conservative Party and the British Foreign Affairs Committee. The article believes that the British government should rescue Arm.

The article believes that after the Brexit referendum, the British government was eager to show the world that it really wanted to go global and show openness. For this reason, the British government decided to sell its national treasure Arm to SoftBank. The sale aims to provide a "long-term home" for the UK's only top semiconductor high-tech company. SoftBank promised to ensure the safety of Arm's innovation capabilities and technology research base.

The article points out that two crucial things were unclear at the time. First, whether Arm would play a key role in protecting national security and maintaining global competitiveness at a time of heightened geopolitical tensions. Second, SoftBank itself would be overextended. More than three years later, Arm has become a victim and faces the situation of being resold to Nvidia, an American chip company.

The risks to national security and competition cannot be ignored. After the collapse of the $40 billion Nvidia deal in February, the government should re-examine how to retain a company that is so vital to the UK’s future.

SoftBank now wants to list Arm independently, and despite a vigorous lobbying campaign by the government, the London Stock Exchange and the investment community to try to persuade SoftBank to choose London as the primary listing venue, a listing on Nasdaq in the United States seems more likely given its technology focus and deeper pool of capital.

The article analyzes that capital is not the only factor. The Russia-Ukraine conflict and China's chip sovereignty plan have made national security a key component of technological leadership.

The article believes that British Prime Minister Boris Johnson's recent last-ditch effort to lobby SoftBank to choose London as its primary listing location is welcome, but it is too late to take timid half-measures. For the sake of national security and the interests of the scientific and technological base on which the UK's economic strength depends, the UK needs a bolder long-term strategy.

The article points out that the British government should ensure that the interests of the United Kingdom are protected in the form of golden shares, such as promising to purchase 25.1% of Arm's shares at market prices to promote, support and, if necessary, force it to be listed in London. This will ensure the future of Arm and end the anxious "pass the parcel" for many years.

There are precedents for similar measures. To safeguard the future of satellite company OneWeb, the British government invested $500 million and established the principle of providing strategic support to technology companies. The British government investment has the power and ability to become a long-term holder of Arm.

As a major shareholder, the government can attract investors from other UK private companies to list in London. Unlike SoftBank's residual shares after the listing, the government's interest will be held for the long term, creating reinvestment opportunities for long-term investors.

The article also suggests that the UK government will not and should not attempt to control Arm or its day-to-day activities, but rather ensure that the company operates with the goal of supporting scientific innovation in the key global industry of semiconductors.

The article concludes that providing Arm with the security and stability needed for long-term investment and protecting its business philosophy are matters of national interest and the government should take immediate action.