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Nvidia to buy chip designer Arm
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Nvidia Corp will buy UK-based chip designer Arm from Japan鈥檚 SoftBank Group Corp for as much as US$40 billion, the companies said yesterday, in a deal set to reshape the global semiconductor landscape.
The sale puts a vital supplier to Apple Inc and others across the industry under the control of a single player and faces likely pushback from regulators and rivals to Nvidia, the biggest US chip company by market capitalization.
Within hours of the announcement, critics questioned how Arm would maintain its open approach under US ownership.
For Softbank, the sale marks an early exit from Arm, just four years after the technology group鈥檚 US$32 billion acquisition. Chief Executive Masayoshi Son has lionized the potential of Arm but is slashing his stakes in major assets to raise cash.
Nvidia will pay SoftBank US$21.5 billion in shares and US$12 billion in cash, including US$2 billion on signing. The deal will see SoftBank and its US$100 billion Vision Fund, which has a 25 percent stake in Arm, take a stake in Nvidia of between 6.7 percent and 8.1 percent.
SoftBank could be paid an additional US$5 billion in cash or shares depending on the chip designer鈥檚 business performance, with Arm employees to be paid US$1.5 billion in Nvidia shares. The Arm deal is expected to close by March 2022.
Nvidia CEO Jensen Huang, who has a penchant for leather jackets and an Nvidia arm tattoo, said the deal, which will boost his firm in data center chips, was 鈥減ro competition.鈥 It marked 鈥渢he first time in history the industry could see something that is genuinely alternative鈥 to Intel Corp鈥檚 domination of the sector, he said.
Taiwan-born Huang emphasized he will retain Arm鈥檚 neutral licensing model and expand it by licensing out Nvidia intellectual property for the first time.
Nvidia said it will license its flagship graphical processor unit through Arm鈥檚 network of silicon partners.
It will build chips for devices like self-driving cars but also make its technology available for others.
The companies did not discuss the deal with the British government until shortly before the announcement because the talks were secret, Huang said. A new artificial intelligence research center will be built at Arm鈥檚 Cambridge headquarters.
The purchase, which is subject to regulatory approvals including in Britain, the United States and China, is likely to come under close scrutiny in China, where thousands of companies from Huawei to small startups use Arm technology.
Arm does not make chips but has created an instruction set architecture, the most fundamental intellectual property that underpins computing chips, on which it bases designs for computing cores. Arm licenses its chip designs and technology to customers like Qualcomm Inc, Apple and Samsung Electronics Co Ltd. Apple鈥檚 forthcoming Mac computers will use Arm-based chips.
Arm will not become subject to US export controls under the deal, said Huang.
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