Chatter is growing chatter that graphics chip maker Nvidia is seriously looking to buy the U.K.-based semiconductor design company Arm Holdings from SoftBank Group which bought Arm in 2016 for $32 billion.
Both the Financial Times and Bloomberg News are reporting that the two companies are in talks about a deal that would bring SoftBank more than its original purchase price.
Eric J. Savitz for Dow Jones Newswires:
Arm doesn’t manufacture or sell chips—instead, the company creates processor designs that it then licenses to companies like Nvidia, Marvell Technology Group, Broadcom, and others. Arm-based processors power 95% of the world’s mobile phones and tablets. The company also designs processors for PCs.
Apple recently announced plans to shift its Mac personal computers to internally designed Arm-based chips [Apple silicon] and away from Intel processors. An Nvidia acquisition of Arm would almost certainly bring objections from other licensees who view Nvidia as a competitor.
A move to sell Arm would be consistent with SoftBank’s aggressive recent push to close the large gap between its market value and its underlying asset value. The company earlier this year unveiled a plan to sell $41 billion of assets and to use the proceeds to buy back stock and pay down debt.
MacDailyNews Take: Due to regulatory scrutiny and opposition from licensees, the most logical outcome is a consortium or another neutral company, not Nvidia alone, buying ARM Limited should Softbank sell.
First stop after buying, sue Apple….
Could Apple have acquired enough of its own Arm-related patented code base to fork totally away from Arm to create its very own, B-processor no longer related to Arm? But maybe Apple is locked in securely in its use of Arm IP so it would not have to worry about any potential anti-Apple shenanigans from Nvidia.
Apple as a original partner may have permanent rights to arm tech, but that won’t stop the company that buys the rights from going to court.
Standard question from the first day of law school: Party A deliberately runs over B with his car. Can A sue the estate of B for the damage to their car? Answer: Yes. Anybody can sue anybody for anything or nothing at all.
The question is whether a rational litigant will spend the time and effort to sue when there is no chance of success. Apple would not have bet the farm on ARM-derivative technology if it was not 100% sure that it has rights to all the relevant intellectual property.
“will spend the time and effort to sue when there is no chance of success.”
You can drive a person or small business to bankruptcy with litigation costs before any verdict is reached, thus rendering the facts of the case irrelevant. Our glorious president is known for doing this.
He is known for doing it repeatedly, but Apple cannot be outspent by any possible ARM purchaser, up to and including the Kingdom of Saudi Arabia.