Rumored NVIDIA-ARM acquisition could massively shake up the chip industry

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Bloomberg says it has been in touch with "people with knowledge of the matter" who haven't mentioned any other potential purchasers. Other potential bidders could also emerge, the people said, asking not to be identified because the information is private. The deal may also be blocked by regulatory bodies over concerns about Apple owning a key licensee that supplies so many competitors' chips.

Nvidia's interest in Arm Holdings may not lead to a sale, however. Announcing the new partnership in November 2019, Nvidia said that its ARM-based reference design platform had also received support from Hewlett Packard Enterprise, Marvell, Fujitsu, Cray and Ampere.

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The prospect of an Nvidia owned Arm would certainly raise fewer hackles than if Apple went for it, but we don't have much more info about any deal for now, time will tell. The latter is the world's largest producer of graphics processing units or GPU chips and was purchased by SoftBank in 2016 for $32 billion. That is because ARM's licensing operation would not fit properly with Apple's hardware and software business model. Recently, Nvidia shares have been on the rise, bringing the company's market capitalisation up to $254 billion. It's also under pressure from Paul Singer's activist investment firm Elliott Management Corp., which has called on the company to boost stockholder value through buybacks and governance changes. An Apple spokesman declined to comment. The chip designer's technology is an important component of the more than 2 billion custom processors that Apple has shipped in iPhones and other devices over the past decade. The two companies worked out a plan to increase spending on chip designs and on new hirings essentially expanding and investing in the company before slowing down the process ahead of returning to the public stock markets.

A phone manufacturer like Apple would face plenty of scrutiny by regulatory agencies if it made a play for ARM, especially the ones that deal with antitrust issues. Since that time the Philadelphia Stock Exchange Semiconductor Index has rallied 185 per cent, observes Bloomberg, which should provide a baseline for valuing Arm now if it were a middling performance tech company.

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