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.
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.