The co-founder of Arm Holdings, formerly Britain's biggest listed technology company, has said China will easily beat the US in a battle for control of the global semi-conductor market.

Hermann Hauser, a pioneer of the Cambridge chip design scene who founded Arm's parent company Acorn and engineered its spin-out during the 1990s, told the Telegraph China was set to "clearly take over" the US in the industry.

Two years after Arm's sale to Japanese giant Softbank, he also expressed disappointment that the UK's "only globally relevant [semiconductor] company is not European anymore".

Under Softbank's ownership, Arm recently launched a new joint venture in China, spinning off a $1.5bn company with majority backing from Chinese investors.

The deal gives China access to Arm's coveted designs and intellectual property, which are used in 90pc of the world's smartphones, giving the country a way to expand its microprocessor industry at a time when US tariffs and a trade war threaten its burgeoning tech sector.

China has been working to bulk out its industries such as semiconductors, microprocessors and 5G. It has set up a $47bn fund, the China Integrated Circuit Industry Investment Fund Co to spur its growth.

But local regulations have also cajoled companies like Arm to form joint ventures with domestic investors, giving China access to crucial intellectual property.