US chipmaker Qualcomm is still seeking a stake in British semiconductor designer ARM. “We are interested in investing,” Qualcomm CEO Cristiano Amon told the Financial Times. ARM plays an essential role in the development of the entire industry. Amon also revived the idea of a consortium that could acquire a strategic stake or take over ARM entirely.
The multi-core processors for smartphones and tablets sold by Qualcomm and other manufacturers such as Mediatek or Samsung are based on designs developed by ARM. Apple no longer only uses the ARM architecture for iPhones, but also in the M1 processors for Macbooks and iMacs. In addition, ARM designs are used for server processors, for example by Amazon or Ampere – and have also arrived in supercomputing.
independence at risk
“If we look at the trend today, I think everyone is betting on ARM,” says Amon, describing the company’s central strategic role for the entire semiconductor industry. The fact that ARM owner Softbank wants to list the chip designer on the stock market is not only observed with a certain amount of nervousness at Qualcomm. The industry fears for ARM’s independence.
In 2016, the Japanese mobile phone group Softbank took over ARM for 24 billion pounds (the equivalent of almost 29 billion euros at the time). In 2020, the Japanese wanted to sell their British subsidiary again and came to an agreement with the US graphics chip manufacturer Nvidia. The partly stock-based deal was initially priced at around $40 billion (37 billion euros), but grew to $66 billion after Nvidia stock price gains before it burst.
Softbank encountered considerable resistance from regulators, industry representatives and the British government when selling it to Nvidia – and finally withdrew. Instead, ARM is now to be taken public; the IPO is planned for spring 2023. Amon sees an opportunity that several partners participate in ARM and thus ensure the independence and openness of the chip designer.
The Qualcomm boss is now again bringing up the idea of a consortium that could strategically participate in ARM. That could both “support a successful IPO” and ensure ARM invests and moves forward, Amon told the Financial Times. But this requires broad support from the industry: “Many companies would have to participate in order to ultimately achieve independence from ARM.” If the consortium is “big enough”, a takeover would also be possible, says Amon.
Consortium takes shape
The Qualcomm boss had already proposed a consortium when it became foreseeable that the sale to Nvidia could burst. There is interest in the industry. Intel boss Pat Gelsinger was open to participating in a consortium in February. “Should such a consortium arise, some kind of participation would probably be very advantageous,” Gelsinger told the Reuters news agency.
The South Korean chip manufacturers Samsung and SK Hynix had already spoken out in favor of ARM being carried out by a consortium with the broadest possible support. This should also meet possible antitrust concerns. “We don’t believe that ARM should be bought by any single company,” said SK Hynix CEO Park Jung-Ho.
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