Mergers and acquisitions are a common means of competition for enterprises, especially in the semiconductor field. For example, Broadcom, which made a fortune by mergers and acquisitions, and Unigroup, which overestimated its wallet and eventually declared bankruptcy due to insolvency. The previous acquisition of Nvidia and Arm, which occurred in September 2020, finally came to an end today.
According to the latest news on February 8, 2022, three people familiar with the acquisition of Nvidia and Arm said that SoftBank Group's intention to sell Arm to Nvidia for $66 billion failed on February 7, 2022. This means that the M&A dispute that has lasted for more than a year is officially over. Regulators in the mainland, the United States, the United Kingdom and the European Union have expressed serious concerns about the impact of the deal on the global semiconductor industry.
The Arm instruction set architecture, which is known for its low power consumption, successfully defeated the CISC complex instruction system represented by X86 in the field of smart phones and PC, and won the favor of Apple, Qualcomm, Samsung, and Huawei in the field of mobile phone processors, and won most of the smart phone chip architecture market in one fell swoop. The huge influence determines the irreplaceability of the Arm instruction set architecture at this stage and the potential threat to the semiconductor chip market.
As a world-renowned GPU developer, Nvidia decided to acquire Arm for $66 billion in order to improve the competitiveness of its products in the GPU market, broaden its business scope, and impact the CPU market. Obviously, this will cause a deformed development of the semiconductor chip market. Although Nvidia claims that the acquisition of Arm will not have any impact on the existing semiconductor market, technology, and system, this is not convincing. This also determines that the follow-up acquisition of Nvidia and Arm will eventually end in failure.
It is worth mentioning that under the agreement, SoftBank, which is responsible for the merger, will receive up to $1.25 billion in "compensation". As a result, Arm's management has undergone a drastic change, and CEO Simon Sigges will be replaced by René Haas, head of the intellectual property department. In addition, as Nvidia's stock price rose, the stock trade of the previously finalized $38.5 billion climbed as high as $87 billion in November 2021. But all of this will be accompanied by the failure of the acquisition.
It is worth mentioning that the acquisition of Intel and SK Hynix DRAM chip businesses in the same time period was successfully completed. As a major supplier of DRAM flash memory in the world, SK Hynix's successful acquisition of Intel's DRAM chip business will further enhance SK Hynix' influence in the DRAM chip market. Some friends may wonder, the same merger, why did the SK Hynix and Intel DRAM business acquisitions succeed, and the Nvidia and Arm acquisitions failed?
A: The nature is different. Nvidia's acquisition of Arm means that the Arm structure will be controlled by NVIDIA, and it is difficult to ensure that Nvidia has no selfish intentions. In addition, the huge influence of the Arm architecture in the chip market is unmatched by Intel's DRAM chip business. The reason why Intel wants to transfer the DRAM chip business is precisely because its DRAM flash memory business is like a chicken rib. For SK Hynix, the successful acquisition of Intel's DRAM flash memory business only increased its own production capacity, and the impact on the flash memory chip market was not large.
Overall, Nvidia's failed acquisition of Arm is a good thing for the global semiconductor industry. It is conducive to avoiding the development of the semiconductor chip market in the direction of deformity.
The Arm and Nvidia acquisition case ultimately failed, what do you want to say about it? Welcome to leave a message and comment below. I am Berber Said Technology, a veteran semiconductor technology enthusiast. Follow me to take you to learn more about the latest semiconductor information and learn more useful semiconductor knowledge.