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Since Samsung and Apple are not interested in it, and NVIDIA has insufficient cash, it is really unclear to whom ARM will be sold.
The latest news shows that major suppliers of Apple, including TSMC and Foxconn, are interested in investing in British chip design company ARM. Four years ago, SoftBank Group bought ARM for $32 billion. Now SoftBank and bankers have approached several tech giants about a potential ARM sale.
In addition to TSMC, the world’s largest chip foundry, and Foxconn, the world’s largest electronics foundry, SoftBank has also approached Apple, Qualcomm and NVIDIA, the people familiar with the matter said.
ARM is a key player in the global technology industry, providing the architecture used in more than 90% of the world’s mobile chips. Apple, Qualcomm, Samsung, Huawei, and almost all chip developers need ARM’s intellectual property if they want to design processor chips for their mobile devices.
It should be noted that selling ARM is only one option SoftBank is considering. In addition, SoftBank is also studying whether to bring ARM back to market as early as next year. Other options include selling shares to a group of investors or companies, the people said. In addition, there have been previous reports that SoftBank is also considering retaining part of ARM’s shares, whether it is a sale or listing.
Some bankers have even held talks with Chinese companies, including China’s largest chip contract maker SMIC, although a deal is less likely, one of the people said.
NVIDIA’s acquisition of Arm would be a disaster
Although NVIDIA’s acquisition of ARM has not yet been finalized, and the two companies are still negotiating, many people have expressed their views on this transaction. Many people think that being acquired by NVIDIA is a good transaction, but there are also some People oppose being acquired by Nvidia, arguing that it could damage the entire industry.
Among those who opposed the acquisition by NVIDIA, Dr. Hermann Hauser, the co-founder of ARM, made it clear that he opposed NVIDIA’s acquisition of ARM in an interview with the British BBC.
Hermann Hauser said allowing Nvidia to buy ARM would be a disaster, as it would compromise the neutrality and ability ARM has to meet the needs of so many different companies and suppliers.
There are new reports that Nvidia may take a stake in ARM, while SoftBank will still retain a stake. It’s unclear whether the reports more accurately reflect ongoing negotiations, or whether they respond to concerns that Nvidia may have full ownership, but the idea of joint ownership between two or more entities has also surfaced.
Dr Hauser told the BBC: “This is one of the fundamental assumptions that the ARM business Model can sell to everyone.”
“The one saving grace about SoftBank is that it’s not a chip company and retains ARM neutrality. If it becomes part of Nvidia, most licensees are Nvidia competitors, so of course look for ARM alternative products.”
Dr. Hauser pointed out that he does not believe that Nvidia will continue to focus its research and development on its current headquarters in Cambridge, UK, after acquiring ARM. He believes, “It will be one of the Nvidia divisions, and all decisions will be made in the US, not in Cambridge. The UK government should help raise funds to bring ARM back to local corporate ownership in the UK.”
Historically, Nvidia would rather develop and scale its own technology in-house than offer it under broad and favorable licensing terms. Nvidia has also never tried to acquire the likes of ARM, and global regulators will no doubt require the company to agree to certain conditions as a requirement to acquire the company.
All of this points to the fact that any attempt by Nvidia to acquire ARM needs to have enough options to secure the rights of the company and the entire mobile ecosystem that relies on the CPU family. And how much that’s a good or bad thing depends on Nvidia’s willingness to commit to a licensing and business model that protects the global infrastructure that relies on ARM in the first place. While Nvidia will indeed be a competitor to some emerging ARM licensees, for now, NV is building CPUs and SoCs for the self-driving car market and other fairly niche AI/ML tasks. Without more clarity on where and how Nvidia intends to compete if it acquires ARM, it will be difficult to assess the risk to other companies.
SoftBank and Nvidia declined to comment on Dr. Hauser’s views.