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Nvidia, a manufacturer of computer graphics (CG) semiconductors, may have obtained everything it needs to dominate the industry for a long time in a deal to buy semiconductor designer Arm.
The two companies announced late on the 13th that Nvidia would acquire an agreement from the Softbank Group to negotiate Arm for about $ 40 billion (about 4.24 trillion yen), which is a combination of stocks and cash. Bloomberg News talks about negotiations between the two companies in JulyI was reporting.
Softbank G sells Arm to Nvidia for 4.2 trillion yen in shares
Why is Nvidia now buying Arm for so much money? For one thing, the novel coronavirus pandemic has increased demand for Nvidia products and stock prices have more than doubled this year. Nvidia, which now has a market value of about $ 300 billion, about 50% more than Intel, has resources for stock acquisitions. The fact that Softbank G, which had been hit by a series of turmoil, was forced to sell its assets on a large scale may also provide Nvidia with an opportunity.
Goodbye to the gun
SoftBank’s total return from owning Arm in the last four years is only about 25%, substantially below its peers, including Nvidia.
Source: Bloomberg. The iShares ETF tracks the performance of the PHLX semiconductor sector index.
The combination of Nvidia and Arm has the potential to reshape the semiconductor industry over the next decade. Nvidia has always positioned itself as a forward-thinking company providing the key components needed for high-growth opportunities such as cloud computing, artificial intelligence, robotic automation, mobile computing, and the Internet of Things (IoT). I came.
The company’s graphic semiconductors are essential to many of them, but there are big gaps in its product line. It is a general-purpose processor, a central arithmetic processing device (CPU), which is the brain of all computing devices. For this reason, customers who buy Nvidia graphics semiconductors must purchase CPUs from other companies.
With the acquisition of Arm, which has semiconductor design and general-purpose processor technology, Nvidia’s lineup will be complete, from mobile phones to computers to cloud computing data centers.
In addition to receiving a license from Arm, by acquiring the company, Nvidia will incorporate its software and programming interface into the arm’s design, and other companies will take advantage of Arm’s advantage in the smartphone market to manufacture Nvidia’s semiconductors. And the possibility of adopting the technology as standard can be increased.
Nvidia’s acquisition of Arm requires approval from the European Union (EU), United States, United Kingdom, and China due to its size. But if it does, Nvidia will continue to reign in the semiconductor industry for the long term.
(Te Kim is a technology columnist at Bloomberg Opinion. After a career as a securities analyst, he used to be in charge of technology at Barons. The content in this column is not necessarily the editorial department or Bloomberg LP., It does not reflect the views of the owners)
Goodbye to the gun
SoftBank’s total return from owning Arm for the past four years is only about 25%, substantially below its peers, including Nvidia.
Source: Bloomberg. The iShares ETF tracks the performance of the PHLX semiconductor sector index.
Original title:
Nvidia-Arm’s $ 40 Billion Deal Will Revolutionize The Chip Industry: Tae Kim （抜 粋）
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
