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After the abandonment of the takeover of ARM by Nvidia, Qualcomm says it is ready to invest in the British company alongside its competitors. With this in mind, the American group could join forces with other chip manufacturers.
© Getty — Andrej Sokolow
What future for ARM? The question has arisen since SoftBank abandoned plans to acquire the British mobile chipmaker by US giant Nvidia earlier this year. The abandonment of this operation, which was to represent the largest acquisition in the history of the semiconductor industry (40 billion dollars), had raised doubts as to the sustainability of this key company in the chip market. electronics.
We just knew that SoftBank, which had spent $ 32 billion in 2016 to take control of ARM, had begun to study other alternatives to separate from it. The Japanese firm was thinking in particular of bringing the British company on the stock market to withdraw from it while making its initial investment profitable. After the failure of the merger with Nvidia, SoftBank retained this option. ARM is expected to IPO by March 2023.
Towards a consortium with other chip manufacturers?
But given the importance of ARM, concerns remain around a potential takeover by a player that could rattle the semiconductor industry. In this context, the American group Qualcomm, which had also joined forces with Google and Microsoft to derail the mega-acquisition of ARM, wishes to take a stake in the British chip designer alongside its competitors. This would take the form of a consortium aimed at maintaining the company’s neutrality in the semiconductor market. “It is a very important asset that will be essential to the development of our industry”estimated Cristiano Amon, general manager of Qualcomm, with the FinancialTimes.
In this context, Qualcomm could join forces with other chip manufacturers to buy ARM, provided that the consortium dedicated to the operation is “large enough”said Cristiano Amon, CEO of Qualcomm, to the British business daily. “It would take a lot of companies to participate for it to have a net effect on ARM’s independence”, he added. However, Cristiano Amon clarified that Qualcomm, one of the British company’s biggest clients, had not yet discussed this investment project with SoftBank. Earlier this year, Pat Gelsinger, the boss of Intel, was rather favorable to such an approach.
$2.7 billion in revenue in 2021
As demand for electronic components skyrocketed during the Covid-19 pandemic, ARM has been in high demand over the past two years. In 2021, the company made $2.7 billion in revenue, up 35% from 2020. “When we look at the current situation, I think the trend is that everything is moving towards ARM”said Cristiano Amon at the FinancialTimes.
To justify his point, he points out that the British company is now going beyond microchips for smartphones, citing the Internet of Things and data centers as new fields of action. “ARM has taken hold everywhere thanks to the collective investment of the whole ecosystem, from companies like Apple and Qualcomm and many others, and that’s because it was an architecture independent and open in which everyone could invest”, estimated the general manager of Qualcomm. It remains to be seen whether the operation led by the American group will be able to come to an end, while the semiconductor market should double by 2030 to weigh 1000 billion dollars.