According to the resource Nikkei Asian Review, TSMC and Foxconn – key suppliers of components for mobile devices to Apple and not only – have expressed interest in purchasing the British chip developer ARM. Earlier it was reported that the main contender for the purchase of ARM is the American developer of graphics cards NVIDIA, however, negotiations on the deal are still ongoing and the actual buyer of the British company may be another party.
According to the Japanese edition Nikkei Asian Review, NVIDIA, TSMC, Foxconn, Apple and Samsung have expressed interest in acquiring ARM. Moreover, the first three received additional financial information at their disposal, which allows them to assess the potential of ARM. According to the latest data, Apple has decided to leave the negotiating table. In addition, Samsung has also officially denied rumors about its desire to invest in the British developer. Thus, NVIDIA, TSMC and Foxconn were at the forefront of a potential deal with SoftBank.
Recall that ARM develops microarchitecture of chips, and also licenses sets of instructions that are responsible for the interaction of chips within the final product. The Cambridge-based British developer is owned by Japanese company SoftBank, which acquired ARM Holdings in 2016 for $ 32 billion. It hopes to recoup those investments either by selling the developer’s shares or selling it out to the best bidder. ARM intellectual property is used by companies such as Apple, Qualcomm, Samsung, Huawei and others, which in general covers almost 90% of the mobile processor market.
According to the Japanese publication, NVIDIA wants to buy all of ARM, not just a part of its assets. This desire for a graphics card manufacturer is quite justified. In 2017, SoftBank was one of the largest investors in NVIDIA, having invested about $ 4 billion in it. However, the source also recalls that in 2019 the SoftBank Vision Fund withdrew its capital from the company.
The purchase of ARM by TSMC also seems quite justified, since both are long-term partners. As for Foxconn, ARM’s purchase by one of the key suppliers of components for Apple’s iPhone smartphones will allow it to diversify its revenues, as well as lay the foundation for further growth. This may seem especially relevant against the backdrop of the third in a row decline in Foxconn’s net annual profit in 2019.
If the ARM sale does take place, analysts predict one of the largest deals in the chip industry. However, the parties to the agreement will have to go through many pitfalls before their actual implementation. In particular, antimonopoly regulators will definitely be interested in such a deal. In addition, ARM partner companies that use its technology can release against her conclusion.
For SoftBank itself, direct selling to ARM is just one option. The Japanese tech giant is also considering releasing the company by early next year. Another option could be the sale of part of ARM assets to the most interested companies or a whole consortium of investors. Analysts predict that SoftBank will be able to maintain a sufficient stake in ARM anyway, even after its sale or flotation.
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