At any point of the digital transition,…
The British antitrust regulator, the Competition and Markets Authority (CMA), said today that it will probe the $40 billion takeover of British chip design business ARM by NVIDIA, according to reports. “We may assess whether ARM has the incentive to stop providing IP authorization services to Nvidia competitors, or increase authorization prices and reduce service quality if the transaction is completed.” CMA said.
Nvidia previously announced that, using a “customer neutral” and “open license” concept, it will continue to run ARM as a separate subsidiary. If these businesses are prepared to compensate, they will receive a licence, even if they are Nvidia’s direct competitors.
Nvidia and SoftBank signed an agreement in September last year to buy ARM from SoftBank at a price of approximately US$40 billion. If the deal can be successfully concluded, this will be the largest semiconductor transaction in history in terms of dollar valuation and the largest chip business in the West will be formed.
In this respect, at the time, the observers claimed that this transaction is simply not ‘commonplace,’ and I assume that this would be assessed by the regulatory agencies of individual countries.
The resistance to this agreement is particularly high in the UK. Hermann Hauser (Hermann Hauser), co-founder of ARM, claimed that this is an absolute nightmare for Cambridge, the UK and Europe. His key worry is that at some stage in the future, Nvidia will move ARM headquarters or decrease ARM’s staff size.
Hauser has said that NVIDIA would kill the business model of ARM, which includes about 500 other firms licensing chip designs, including some companies that deal directly with NVIDIA. This trade is thus going to form a monopoly.
Although this will be the largest semiconductor transaction in history, calculating the transaction based on the value of the dollar will, in effect, underestimate the magnitude of the transaction to a great degree.
Almost every ARM, from Apple iPhone to Google’s Android device Samsung Galaxy, is currently sold with an intelligent cell phone heart.
Weapon processing is now found in many smaller chips built into diverse computer systems and applications, in addition to mobile processors.
ARM is an incentive for Nvidia to improve its fast-growing business of selling data centers with chipsets and applications. Furthermore, this deal would further reinforce the role of Nvidia and make it more difficult for rivals to shake up their business.
On the other hand, Huang Renxun, CEO of Nvidia, is reasonably confident, assuming that the regulatory authorities will allow this deal. The two sides intended it to be finished within 18 months when they revealed the deal.