ARM is up for sale, potentially followed by LEG

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dt

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#2528812 25-Jul-2020 23:02

Did some light reading on the topic and found this

As for SoftBank and Apple, Bloomberg says, "The two firms had preliminary discussions, but Apple isn’t planning to pursue a bid. Arm’s licensing operation would fit poorly with Apple’s hardware-focused business model. There may also be regulatory concerns about Apple owning a key licensee that supplies so many rivals.

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ezbee

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#2531292 30-Jul-2020 11:27

Looks like there might be complications for any new ARM owner to deal with.

A tale of 2 ARMs , ARM only owns 49% of ARM China.

Arm China brands itself a 'strategic asset', calls for Beijing's help in boardroom dispute with Brit HQ
https://www.theregister.com/2020/07/29/arm_china_open_letter/
""
Wu, who led Arm’s China business since 2014, hit back saying that Arm China is “an independent entity and legally registered in China,”
""

After stopping Huawei business, they restarted it , based on work being done in UK so not covered by USA technology transfer limitations.

So any buyer may find things a bit more tricky re ARM's business dealings.

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#2531312 30-Jul-2020 11:59

ezbee:

Looks like there might be complications for any new ARM owner to deal with.

A tale of 2 ARMs , ARM only owns 49% of ARM China.

Arm China brands itself a 'strategic asset', calls for Beijing's help in boardroom dispute with Brit HQ
https://www.theregister.com/2020/07/29/arm_china_open_letter/
""
Wu, who led Arm’s China business since 2014, hit back saying that Arm China is “an independent entity and legally registered in China,”
""

After stopping Huawei business, they restarted it , based on work being done in UK so not covered by USA technology transfer limitations.

So any buyer may find things a bit more tricky re ARM's business dealings.

Looks like a bit of a sticky wicket.

I like how the CEO is just flat-out refusing to leave, even firing his interim replacement.

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#2533504 3-Aug-2020 08:15

Looks like Nvidia is quite interested, according to Bloomberg.

Makes sense really, since Nvidia has the deep pockets, is fabless, and not a major licensee.

neb

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#2533644 3-Aug-2020 12:10

ShinyChrome:
Looks like Nvidia is quite interested, according to Bloomberg.

Makes sense really, since Nvidia has the deep pockets, is fabless, and not a major licensee.

It's also going to be problematic in terms of vested interests. Not quite as bad as Apple or Samsung buying ARM, but they're still a competitor or potential competitor to a lot of other ARM licensees.

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#2533654 3-Aug-2020 12:25

Coverage on The Next Platform https://www.nextplatform.com/2020/07/31/the-dollars-and-sense-of-nvidia-paying-a-fortune-for-arm/

ezbee

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#2533704 3-Aug-2020 13:02

Interesting article ,

Once you have a buyer, you start the whole circus of getting approval from the major regulatory bodies around the world.

Antitrust, Monopoly regulators and controls on sensitive technologies.
You will have Governments using these to get something favorable for their chip slingers in the deal.

NVIDA may not have to worry about USA , being American, but others will want their pound of silicon.

In current global environment that's got to be fun.

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#2533727 3-Aug-2020 13:45

PolicyGuy:

Coverage on The Next Platform https://www.nextplatform.com/2020/07/31/the-dollars-and-sense-of-nvidia-paying-a-fortune-for-arm/

Great article, thanks for sharing. It's interesting to see that ARM is not actually as profitable as one might think based on their rumored market valuation, but makes sense for Nvidia when you consider their recent acquisitions and a possible pivot in strategy.

neb: It's also going to be problematic in terms of vested interests. Not quite as bad as Apple or Samsung buying ARM, but they're still a competitor or potential competitor to a lot of other ARM licensees.

I think that is going to be a problem regardless, it's just about trying to find the least objectionable buyer to squeeze the sale past anti-trust regulators. It doesn't seem like there are any interested players without some sort of small vested interest at minimum.

Given that Nvidia's biggest avenues of revenue are not using ARM products (not sure where Tegra fits in, but assuming slices of gaming/automotive/OEM, I can't imagine it adding up to much overall), I suspect they would rank a whole-lot-less of a concern than the companies with major ARM based product lines like Apple, Samsung etc, or major interests in competing solutions, like Intel.

As the article above suggests, it seems like a potential move to expand their datacenter business in combination with their existing interests.

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#2533754 3-Aug-2020 14:15

ShinyChrome:
Given that Nvidia's biggest avenues of revenue are not using ARM products

"Not using ARM now" is the problem. If they're buying ARM to get out of the "Nvidia can only do GPUs" rut they've been stuck in for 20 years then they could end up competing with a lot of their licensees. And if they're not buying ARM for that reason then I don't know why they'd otherwise be doing it.

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#2533776 3-Aug-2020 14:36

neb: "Not using ARM now" is the problem. If they're buying ARM to get out of the "Nvidia can only do GPUs" rut they've been stuck in for 20 years then they could end up competing with a lot of their licensees. And if they're not buying ARM for that reason then I don't know why they'd otherwise be doing it.

Oh definitely, and I must admit I'm not sure what anti-trust protections exist for the buyer to say "No, I don't have the same interests as my competitor's, so let me buy it please", and then turn around and announce a new mobile division the day after the sale goes through.

I would think that the only way they are gonna get it across the line is if this comes with a business plan to integrate ARM based designs into their datacenter business, since that segment seems to be their direction and Chipzilla/Intel dominates there with their x86 based designs.

From what I gather, mobile computing seems to be the biggest segment of concern for ARM based IP anyway; to which Nvidia seems to have very little interest in becoming a major player in.

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#2533814 3-Aug-2020 15:19

Softbank shares seem to be doing well at the moment,
but a ways off the Y2000 valuation that had the founder beat Bill Gates for 3 days as world richest.
https://www.msn.com/en-us/finance/companies/softbank-hits-new-highs-as-son-e2-80-99s-investing-record-is-reappraised/ar-BB17gEYp

A possible shareholding deal , rather than a direct sale.
https://taipeitimes.com/News/biz/archives/2020/08/03/2003741023

""
Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said.

The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private.
""

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#2534225 4-Aug-2020 08:10

More rumors, with now Samsung apparently looking to acquire a small stake.

"Samsung Electronics is considering acquiring a small stake in Arm, which will be between 3 percent and 5 percent," said the top industry official, who requested to remain anonymous. "Arm will be acquired by a consortium led by multiple parties from the semiconductor industry given the complex nature of Arm's shareholding structure."

The same report also casts aspersion on the rumors about Nvidia:

The official also expressed doubt whether Nvidia has sufficient financial firepower to become an independent acquirer of Arm given SoftBank reportedly wants to sell Arm based on a valuation of over $41 billion.

It raises a good point though; the easiest way to satisfy regulators is a consortium of companies pooling their pocket money together for stakes in ARM. The stake translates into less licensee fees, so everybody wins.

ezbee

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#2563866 14-Sep-2020 17:18

Going , going ( Bang ) , Gone.
Or is it ?

SoftBank Group selling Arm to Nvidia for up to $40 billion
https://www.japantimes.co.jp/news/2020/09/14/business/corporate-business/softbank-selling-arm-to-nvidia/

Getting approval by regulatory authorities , will spin this out for some time to come, maybe a year.
Could be tricky, UK will want HQ to stay there, USA will want strong assurance re no transfer of technology to China.
China will want opposite to USA, more technology transfer and independence for ARM China.

Maybe never ?

The acquisition of NXP by Qualcomm was scuttled by China not giving approval.
Qualcomm will pay $2 billion to end failed acquisition of NXP
https://www.theverge.com/2018/7/25/17614218/qualcomm-nxp-merger-fails-breakup-fee

This will keep giving Technology writers column inches for some time to come.

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#2564020 14-Sep-2020 19:52

ARM founder says a sale to Nvidia would be a disaster for ARM

https://www.bbc.com/news/technology-53637463

My perception is there is very little synchronicity and it's a mild hedge and cash sink for Nvidia.

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#2564175 15-Sep-2020 08:27

Nvidia has put out a press release announcing the sale.

Notably, in the second-to-last paragraph:

... Completion of the transaction is expected to take place in approximately 18 months.

I can't imagine US regulators having too much trouble with it, and it sounds like they are trying their best to appease UK regulators:

... Following the closing of the transaction, NVIDIA intends to retain the name and strong brand identity of Arm and expand its base in Cambridge. Arm’s intellectual property will remain registered in the U.K.

NVIDIA will build on Arm’s R&D presence in the U.K., establishing a new global center of excellence in AI research at Arm’s Cambridge campus. NVIDIA will invest in a state-of-the-art, Arm-powered AI supercomputer, training facilities for developers and a startup incubator, which will attract world-class research talent and create a platform for innovation and industry partnerships in fields such as healthcare, robotics and self-driving cars.

I also read in one of the articles above that the deal was contingent on ARM UK resolving their spat with ARM China, so I'm guessing that some deal was made there.

Given Nvidia already seems to have a reputation as being difficult to work with, maybe we will see some growth in RISC-V or the like?

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