Nvidia is buying SoftBank’s Arm chip division in biggest semiconductor deal ever

Today, few minutes ago a new video entitled Nvidia is buying SoftBank’s Arm chip division in biggest semiconductor deal ever was revealed by the Youtuber: Isabella John

As informed in the youtube description by Isabella John: Nvidia is buying SoftBank’s Arm chip division in biggest semiconductor deal ever\n\nNvidia Corp. said it agreed to buy SoftBank Group Corp.’s chip division Arm Ltd. for $40 billion, taking control of some of the most widely used electronics technology in the semiconductor industry’s largest-ever deal. Nvidia will pay $21.5 billion in stock and $12 billion in cash for the U.K.-based chip designer, including a $2 billion payment at signing. SoftBank may receive an additional $5 billion in cash or stock if Arm’s performance meets certain targets, the companies said Sunday in a statement. An additional $1.5 billion will be paid to Arm employees in Nvidia stock. SoftBank shares surged as much as 10% on news of the deal and renewed talks for the company going private. Arm’s importance far outweighs its revenue, which comes from licensing chip fundamentals and selling processor designs. Its technology is at the heart of the more than 1 billion smartphones sold annually. Chips that use its code and its layouts are in everything from factory equipment to home electronics. Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox. “It’s a company with reach that’s just unlike any company in the history of technology,” Nvidia Chief Executive Officer Jensen Huang said in an interview. “We’re uniting Nvidia’s leading AI computing with Arm’s vast ecosystem.” The acquisition is fueled by the drive to bring artificial intelligence to everything that has an on-switch, the CEO said. Having succeeded in selling Nvidia’s graphics chips to owners of data centers to speed up image recognition and language processing, Huang is looking to make sure his technology helps spread that to everything from self-driving vehicles to smart meters.​ ​The initial payment from Nvidia marks a small premium over the $31.4 billion that SoftBank paid to acquire Arm in 2016, previously the semiconductor industry’s biggest deal. The Japanese company is expected to own less than 10% of Nvidia following the transaction, according to the statement. Regulatory approvals may well prove challenging. The companies said sign-offs are needed from China, U.K., European Union and U.S. authorities and may take as long as 18 months. China’s approval may be particularly difficult given rising tensions with the U.S. ​“Now Arm will become a U.S. firm, and the conflict over semiconductors between the U.S. and China is becoming fierce as China still controls Arm China,” said Koji Hirai, head of MA advisory firm Kachitas Corp. in Tokyo. In comments after the deal announcement, Huang said his team “fully expect to spend time with the regulatory bodies in China,” but have every confidence in getting approval for the takeover. Another major concern is whether the acquisition will upset Arm’s relationships with customers like Apple Inc. and Intel Corp. The chip designer has been able to work with a broad range of partners in part because it didn’t compete with them. “We would imagine the bulk of Arm’s current licensees will be (no pun intended) up in arms,” Sanford C. Bernstein analysts including Stacy Rasgon wrote in reaction to the news. Huang said he will preserve Arm’s neutrality and wants to expand its client list. He argued Nvidia is spending a lot of money for the acquisition and has no incentive to do anything that would cause clients to walk away. Nvidia said the U.K. company will “continue to operate its open-licensing model while maintaining the global customer neutrality that has been foundational to its success.” Nvidia will add its technology to the offerings licensed by Arm, the Santa Clara, California-based company said. Under Huang, Nvidia has risen rapidly up the ranks of technology companies in market value and influence. Already the dominant force in graphics chips that make video games more realistic, Nvidia has carved out a slice of the market for data center chips and is moving into self-driving vehicles. Cambridge, U.K.-based Arm has created a successful niche for itself by being independent. Fierce rivals such as Apple, Intel, Samsung Electronics Co., Qualcomm Inc., Broadcom Inc. and Huawei Technologies Co. are all licensees. They either use Arm’s designs as the basis of their own chips or license its instruction set, the fundamental code used by processors to communicate with software, for proprietary efforts. The acquisition by Nvidia, also a licensee, is a challenge to that neutrality. SoftBank’s purcha…

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