Authorities in the European Union, the United Kingdom, the United States and China fear that the merger of ARM and Nvidia will create a dominant semiconductor player. Nvidia has long dominated the graphics chip and PC market. Thanks to the growth of fields such as artificial intelligence, it is also gaining a position in servers, data centers and supercomputers.
ARM licenses its processor cores to companies such as Apple, Qualcomm and many others. As a result, its technology powers the vast majority of smartphones, tablets and other smart devices. ARM’s capabilities are growing. It has an M1 chip built on it, which Apple deploys on Mac computers. It achieves high performance with very high battery life. ARM also powers Fugak, the world’s most powerful supercomputer. Amazon Web Services, the world’s largest cloud, is newly deploying ARM on its servers. “Operating costs have fallen by 40 percent,” Amazon engineers told the E15.
China has good reasons not to let the business go. Its companies are under the United States embargo, which means that they have very limited access to chips and their production. ARM is formally a British company owned by the Japanese conglomerate SoftBank. China is heavily dependent on ARM and it is not in its interest for the Americans to take over such a key company. “We rely on ARM to develop our Kunpeng server processors, mobile chips and more,” said Ken Hu, Chairman of Huawei E15.
Consideration of the future of its technology sector plays a major role in the UK’s thinking. During the acquisition of ARM in 2016, SoftBank undertook to retain its headquarters in Cambridge and other local investments and people. In the case of Nvidia, the plans are not clear. Britain is dealing with the gradual sale of local chip companies. Since 2010, $ 42 billion worth of industry companies have been sold to new foreign owners. Most recently, China’s Nexperia announced the acquisition of chip maker Newport Wafer Fab. The Boris Johnson government is still trying to stop the action. Brexit has hampered further investment, and Intel has canceled plans to build the factory because of it.
The European Union is particularly concerned about the loss of competition. “The sale could lead to restrictions on access to ARM’s intellectual property,” said EU Free Commissioner Margrethe Vestager. The US Federal Trade Commission is also afraid that Nvidia will keep the important technology especially for itself.
The country inquiry is not over yet. If the deal doesn’t work, Nvidia will lose money. “This is a prepayment of $ 1.25 billion,” the company told investors.
Nvidia underestimated the strength of the opposition to the acquisition of ARM, ARM officials told E15 during a visit to Cambridge headquarters. Nvidia’s founder and CEO, Jensen Huang, who recently received the highest award in the semiconductor industry, is touring regulators, customers and partners and working to allay concerns. “There are so many segments in the market and there is no chance that one company will control them,” he said.
Concerns revolve around ARM even under the current owner. Through the Vision Fund, SoftBank is investing tens of billions of dollars with the help of Saudi Arabia. If the Nvidia deal doesn’t work, a new buyer is likely to be sought.