(Bloomberg) -- As it seeks to pull off what could be the largest initial public offering of the year, Arm Holdings Ltd. spent more than 3,500 words explaining the risks it faces in China, a critical market that accounts for about a quarter of its revenue.

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In a chunky section of the IPO filing’s 330-page prospectus, the British designer of chips detailed a litany of challenges in the country: a concentration of business in the People’s Republic of China that “makes us particularly susceptible to economic and political risks affecting the PRC”; a downward spiral in Asia’s biggest economy; rising political tensions with the US and the United Kingdom; and the potential complete loss of control over its pivotal Chinese subsidiary.

Arm runs most of its China business through an independent unit, called Arm Technology Co., which is its single largest customer and accounted for about 24% of its sales in the year ended March. But Arm and its parent, Japan’s SoftBank Group Corp., don’t control that business.

Instead, SoftBank owns approximately 48% of Arm China, with the majority held by local investors, including entities affiliated with Allen Wu, Arm China’s former chief executive officer who was fired over allegations of conflicts of interest in 2020. The prolonged power struggle still leaves open the risk of leadership changes and affect regional operations.

“We depend on our commercial relationship with Arm China to access the PRC market,” the filing said. “If that commercial relationship no longer existed or deteriorates, our ability to compete in the PRC market could be materially and adversely affected.”