Arm
Hey you! Do you want to control the future of basically every mobile device on Earth, and even some laptops and desktops? I have a deal for you! ARM Limited is for sale, the company in charge of the ubiquitous ARM CPU architecture that powers most battery-powered devices. It will only cost a few tens of billions of dollars. Bloomberg has two reports on the matter, one stating that Nvidia is interested in buying ARM and the other stating that Apple does not.
ARM is currently owned by the SoftBank group, a giant Japanese company previously listed on Ars to buy Boston Dynamics, Sprint and buy stakes in Uber and GM’s Cruise. SoftBank bought ARM for $ 32 billion in 2016, and since then, ARM has only become more powerful. ARM does not manufacture chips; instead, it sells IP based on the ARM CPU architecture in the form of its internal CPU Cortex designs or licenses to design whatever it wants using the ARM instruction set.
In 2016, SoftBank described ARM as their most prized possession, and SoftBank CEO Masayoshi Son described it as “the center of the SoftBank hub.” In the coronavirus era, SoftBank has been hit hard by Uber and WeWork valuations, along with the bankruptcy of OneWeb, and is now willing to sell ARM to raise money.
As for SoftBank and Apple, Bloomberg says: “The two firms had preliminary discussions, but Apple does not plan to seek an offer. Arm’s licensing operation would be a bad fit with Apple’s hardware-centric business model. There may also be regulatory concerns. about Apple owning a key licensee that caters to so many rivals. “
Apple’s situation is probably the case for most companies with an attachment to ARM. ARM is so widespread that buying it will be a regulatory nightmare, and even the world’s most lenient rubber stamp regulators must shudder at the thought of an existing ARM licensee buying ARM. Apple is making a famous transition from its entire Intel Mac line to internal ARM chips, and it has the money to buy ARM. However, would any government approve of Apple gaining so much power over the Android ecosystem? Qualcomm is another company closely linked to ARM, but it is already a condemned monopoly in many countries thanks to its power over the modem and the ARM SoC smartphone market. Google has the cash, too, but it’s already making regulators nervous about its control over the smartphone industry via Android.
SoftBank was a great home for ARM, as it allowed the company to be neutral: SoftBank did not manufacture devices or sell chips. Many companies interested in ARM would create a major conflict of interest.
Nvidia it is an ARM licensee, but not a major competitor in the smartphone industry. Nvidia’s chips are sold by the strength of their GPUs, and the company’s biggest design wins (really, arguably “just design wins”) are the Nintendo Switch, the AR-focused Magic Leap headphones, and its own box. of Android TV Nvidia Shield. As Qualcomm shut it out of the mobile SoC market, Nvidia began to focus on car hardware. The company’s latest SoC is called “Orion” and it seems designed exclusively for autonomous cars, where its powerful GPUs can aid in all kinds of computer vision computing. With such a small share of the market, Nvidia could be one of the few ARM licensees that could squeak for regulatory approval.
If Nvidia doesn’t pull the trigger and ARM turns out to be “too big to buy,” there are other options. The Wall Street Journal’s original “ARM is for sale” report mentioned that “SoftBank may finally choose to do nothing” and discover a different way to deal with its money problems. The idea of an IPO for ARM has also been raised by SoftBank in the past, and this solution would also solve the regulatory issues surrounding the sale to a tech company.
