In September, 2020, NVIDIA announced that it would acquire arm at a price of US $40billion, and said that the acquisition would be completed within 18 months. But then, under the continuous opposition of national regulators and many technology giants, the acquisition now ended in failure. Nevertheless, American companies do not seem to give up taking arm.
According to a Bloomberg report on Monday, when arm failed to "sell itself" and was preparing to go public in the United States, Qualcomm expressed its intention to form a joint consortium with other chip manufacturers to jointly acquire part of the equity of arm, so as to maintain the neutrality of the British chip design company in the semiconductor market.
Qualcomm hopes to take shares
After NVIDIA failed to acquire arm with us $66billion earlier this year, arm's parent company, Softbank group of Japan, planned to list arm on the New York Stock Exchange. However, given the company's key role in the global technology industry, the IPO raised concerns about the company's future ownership.
As one of arm's largest customers, Cristiano Amon, chief executive officer of Qualcomm, said: "we are interested in investing in arm. This is a very important asset and is crucial to the development of our industry." He added that if the consortium making the acquisition is large enough, Qualcomm may join hands with other chip manufacturers to directly acquire arm. However, he also mentioned that this "requires the participation of many companies".
As a chip architecture design company from the UK, arm has a new generation of low-power chip architecture that can compete with x86 architecture. Compared with the closed-source x86 architecture, arm's success lies in its open authorization nature, which brings most of the world's top chip design companies into its own business, especially in the mobile processor architecture market, such as Qualcomm and Apple And MediaTek are all loyal customers of arm.
Arm, which has such a global mainstream chip architecture, is undoubtedly a "sweet cake", which also led Softbank of Japan to invest $32billion to acquire it in july2016.
The initial goal of Softbank is to become the next potential IOT leader by virtue of the acquisition of arm. However, arm's revenue in the following three years dashed Softbank's dream: revenue of $1.831 billion in 2017, $1.836 billion in 2018 and $1.898 billion in 2019 - after three years, arm's revenue almost "stood still". Earlier, some British politicians called on the government to acquire the shares of arm, showing the company's position as a key strategic asset in the UK.
However, despite the fierce lobbying in the UK, Softbank is still promoting arm's listing in the United States, which has raised questions about arm's future control. Amun's intervention has provided new impetus for the idea that the consortium composed of chip manufacturers has become the cornerstone investor of arm.
In addition to Qualcomm, Intel CEO pat Gelsinger said earlier this year that Intel might support this initiative. However, Amun said that Qualcomm had not communicated with Softbank about its potential investment in arm.
Arm ownership is particularly important
In the current market, the chip architecture has been monopolized by Intel x86 and arm, and the arm architecture has the characteristics of low cost, high performance and low power consumption, which is very suitable for the field of mobile communication. At present, arm has provided chip design licenses to more than 500 companies. Apple's A-Series, Huawei's Kirin and Qualcomm's Xiaolong chips are all designed based on ARM architecture. Analysts predict that the global semiconductor demand will double in the next 10 years, and the world is trying to recover from the chip crisis that has lasted for many years. Therefore, chip manufacturers are more dependent on arm than ever before.
Earlier, Qualcomm had opposed NVIDIA's proposal to acquire arm, saying that it was meaningless for a single chip manufacturer to control a company of fundamental value to the entire industry. "Due to the collective investment of the entire ecosystem (such as apple, Qualcomm and other companies), arm has achieved success in various fields, precisely because it is an independent and open architecture, and everyone can invest." Amun said.
"I think the trend is that everything is shifting to arm," amon said. He refers to the recent expansion of the chip IP designer from mobile phones to automobiles, the Internet of things and data centers.
After several years of low returns, arm achieved a record $2.7 billion in revenue in 2021, an increase of 35% year-on-year. The revenue from its licensing business increased by nearly two-thirds, and the royalties increased by one-fifth to US $1.5 billion.