Nvidia-Arm Deal Could Be Reached In 'Next Few Weeks'

Daniel Fowler
August 2, 2020

This acquisition for Arm could be the largest one in history of the semiconductor industry as companies now seek to diversify and scale. The idea of offloading ARM to another company has been floating around for a while now and it looks like Nvidia could be the best suitor. It would be interesting to see the impact this would have on the mobile industry, in addition to Apple's recently announced plans to release ARM-powered Macs.

Nvidia would make an interesting owner for ARM - while the company is the leader for GPUs (which ARM also designs), it has little to do with CPU design or mobile hardware outside of its Tegra line of mobile chipsets (most famously used by the Nintendo Switch and the Nvidia Shield line of set-top boxes), which actually are based on ARM designs. The publications also noted that a deal could invite scrutiny from major companies that license Arm's silicon IP, including Apple and Qualcomm, as well as antitrust regulators.

Concerns about antitrust were what originally resulted in SoftBank, a neutral party, acquiring Arm Holdings the last time it went up for sale.

"With Nvidia's low-priced fabless model enabling it to focus on R&D, engineering and programming, the fit with Arm would be ideal", said Neil Campling, an analyst at Mirabaud Securities.

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Nvidia, based in Santa Clara, California, is the world's largest maker of graphics processors, and it's spreading the use of the gaming component into new areas such as artificial intelligence processing in data centers and self-driving cars.

The proposed deal includes "both cash and stock and that it valued ARM at above the $32bn price that SoftBank paid for the business in 2016". As to how much NVIDIA intends to pay, sources familiar with the subject have hinted that the offer could be to the tune of US$32 billion (~RM135 billion).

Nvidia's market value has increased to more than $260 billion in that time, surpassing Intel. The stock slid 1.4 per cent Friday morning in NY after news of the deal talks.

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