In what could easily be the largest-ever acquisition in the semiconductor industry, NVIDIA is interested in ARM. According to persistent reports, NVIDIA Corp. is in advanced talks to acquire ARM Ltd., the chip designer that SoftBank Group Corp. currently owns. The banking, finance, and investment group had acquired ARM for $32 Billion about four years ago.
ARM, the advanced semiconductor designer, and manufacturer of silicon chips that power a vast number of everyday electronics, consumer gadgets as well as enterprise gear, might change ownership soon if NVIDIA has its way. The manufacturer of high-end and premium graphics cards is believed to a serious contender in the race of acquiring ARM Ltd. from SoftBank. Although the deal could set a new record in terms of value, there are quite a few potential roadblocks that might play spoilsport.
NVIDIA Trying to Acquire ARM Ltd. But Intel and Antitrust Agencies Might Pose Hurdles?
NVIDIA and Softbank are reportedly in advanced-level talks to acquire ARM Ltd. The company amidst the acquisition discussion is a very critical and important player in a modern-day world that’s full of electronics that run on silicon chips and processors.
Bloomberg and the FT are both reporting that Nvidia is in advanced talks to acquire ARM. Massive industry news if it goes ahead https://t.co/ElFNPc7z6q
— Tom Warren (@tomwarren) July 31, 2020
It appears NVIDIA is the only serious contender who is in discussions with SoftBank, claim reports based on unidentified sources who wish to remain confidential. An acquisition of ARM could be the largest ever in the semiconductor industry. The silicon chip industry has been consolidating in recent years as companies seek to diversify and add scale.
Not just owing to the scale and potential quantum of the deal but also due to the potential repercussions, the acquisition might face a lot of hurdles including opposition from other players and regulatory scrutiny.
How Much Is ARM Worth And What Will Happen If The Deal Goes Through?
It is important to note that NVIDIA is already a large customer of ARM. However, so are several ARM licensees such as Qualcomm Inc., Advanced Micro Devices Inc., and Intel Corp., These companies could easily demand written assurances that any new owner would have to continue providing equal access to ARM’s instruction set. Interestingly, it was these and a few other concerns that resulted in SoftBank, a neutral company, buying ARM the last time it was for sale.
The reports about negotiations, discussions, or even any decisions, haven’t been corroborated by any party. Hence these are mere claims. As such, the deal could drag on quite long and still fall apart. Analysts claim SoftBank may gauge interest from other suitors if it can’t reach an agreement with NVIDIA.
MacOS ARM will only support Apple GPUs, guess that means no more NVIDIA, AMD or Intel. Supporting that platform for gaming becomes more complicated each day 🙁 https://t.co/CRV3aqA9rT
— David Amador 🐙 (@DJ_Link) July 8, 2020
ARM is quite a valuable company not just for the money but also for the technology and the potential applications of the technology that the company specializes in. ARM is steadily pushing its architecture into smart cars, data centers, and networking gear. While exact valuations are unclear, ARM Ltd. could be worth $44 Billion if it pushes for an Initial Public Offering (IPO) next year. This valuation is reportedly set to soar to $68 Billion within the next three years, claim analysts.
NVIDIA, on the other hand, saw its valuation jump twenty-fold in the past five years. Financially speaking, NVIDIA is worth $260 Billion and is now larger than even Intel. Hence NVIDIA has the means to acquire ARM.