Graphics-chip maker Nvidia Corp is reportedly nearing a deal to acquire Arm Ltd. from Japanese conglomerate SoftBank. This acquisition could help it expand its reach into mobile devices.
Nvidia and SoftBank in advanced talks to buy Arm, but the deal is not yet finalized
An announcement to that effect could be expected as early as next week. Both the companies have been discussing a deal worth $40 billion in cash and stock. This is as per people familiar in the matter, who have asked not to be identified since the details are not yet public.
They also said that the deal is not yet finalized and the talks may still fall apart. Representatives from both Nvidia and SoftBank have declined to comment. As per Bloomberg, if this deal goes through it would probably attract intense scrutiny.
Nvidia’s deal worth $40 billion for Arm Ltd., the largest ever in the semiconductor industry
Also, Bloomberg News had reported on July 31 that Nvidia was in advanced talks to acquire Arm Ltd. and was the only bidder for the UK-based semiconductor designer. The Wall Street Journal reported on Saturday that a deal worth $40 billion could be sealed early next week.
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This deal for Arm could be the largest ever that the semiconductor industry has seen to date. The semiconductor industry in recent years has also been consolidating as companies seek diversification and add scale.
In case the agreement is sealed, it could attract potential complaints from the competitors of Arm Ltd., namely Samsung Electronics Co., Apple Inc., Qualcomm Inc., Broadcom Inc., Intel Corp., and Huawei Technologies Co., which license its designs or code for their products.
SoftBank’s purchase of the leading semiconductor designer, largely uncontested four years ago
In June, Apple had stated that it will overhaul its Mac computers with Arm chips, which are similar to the ones it designs for iPhones and iPads, making it move away from the Intel processors that it has used from the last 14 years. Arm licenses its chip instruction set to companies like Apple. This instruction set is a collection of commands used to control the chip.
To date, Arm has successfully carved an independent niche for itself in the industry. If Nvidia is successful in acquiring Arm, it would be a challenge to its neutrality. SoftBank had purchased Arm four years ago for around $32 billion. This deal was largely uncontested because the Japanese company was not a competitor to any of Arm’s customers.