One of the biggest deals in the history of the semiconductor industry is reportedly nearing completion, according to a new report from The Wall Street Journal.
Japanese tech giant SoftBank is supposedly close to nearing a deal with Nvidia to sell British chip designer Arm. The deal is worth “more than” $40 billion. It would be a win-win for both parties and would create a chip giant unlike any other.
However, the firms involved would need to get through a huge amount of regulatory scrutiny before the massive deal could go through.
SoftBank first acquired Arm in 2016 for the hefty sum of $32 billion. If the reported deal goes through, the company would turn a significant profit in just a few years.
Nvidia and SoftBank have reportedly been taking part in exclusive talks for several weeks regarding the sale of Arm. A deal could arrive as early as next week. Of course, it could also fall apart.
That being said, reports make it seem like both parties are serious about the deal. If it goes through, it would give Nvidia a huge edge in a variety of computing segments. Its offerings could extend to mobile chips and licensing deals to complement its current strong positions in the GPU and supercomputing sectors.
SoftBank would also benefit from the deal. An influx of $40 billion would help resurrect its slumping stocks and give the tech giant a chance to refocus its efforts on other projects.
If a deal is reached, it has the potential to be one of the largest ever in the chip industry. It would also be one of the largest buyouts of 2020. Another noteworthy chip deal occurred earlier this year when Analog Devices purchased Maxim Integrated Products for $22 billion. The Nvidia-SoftBank deal for Arm is reportedly worth almost double that figure.
Regulatory Battles Await
While the prospect of this deal is certainly intriguing, it won’t go down without a fight. If Nvidia gains ownership of Arm, it would become a chip industry mega-player overnight. That would undoubtedly spark regulatory concerns from federal officials and private groups alike.
With Arm under its control, Nvidia could singlehandedly dictate the future of companies like Apple and Samsung that rely on Arm-based chips. There will need to be plenty of reassurances that Nvidia would play fair with its new assets in order for the deal to get approved.
Aside from regulators, Arm’s current customers may push back on the deal as well. That would set the stage for a major industry showdown with some big names all getting involved.
This deal is worth keeping an eye on as it continues to unfold. Stay tuned to The Burn-In for the latest on the SoftBank-Nvidia Arm acquisition and other news from around the semiconductor industry.