Nvidia’s plan to acquire ARM has now become even more unpredictable. Nvidia’s $40 billion acquisition of ARM from Japan’s SoftBank is one of the largest semiconductor acquisitions in history. When it was announced in September last year, it caused an uproar in the industry.
After companies such as Qualcomm, Microsoft, Google and Huawei complained that the transaction would be detrimental to the semiconductor industry, regulators in the United States, the United Kingdom, China and Europe also launched investigations.
Based on national security issues, the UK Competition and Markets Authority submitted a report to the British Minister of Culture Oliver Dowden on July 20 this year. Bloomberg quoted an unnamed person familiar with the matter as reporting that the report expressed concerns about the national security of the United Kingdom and that the United Kingdom currently tends to refuse acquisitions.
Another unnamed person familiar with the matter said that due to national security considerations, the United Kingdom may conduct a more in-depth review of the acquisition. It is not yet clear how the national security of the United Kingdom will be affected if ARM changes from ownership in Japan to ownership in the United States. However, governments have begun to regard semiconductor technology as an important asset in the face of global chip shortages.
An Nvidia spokesperson told CNBC:
We will continue to cooperate with the British government to complete the regulatory process. We look forward to their problems and hope to solve any problems they may have.
Nvidia acquisition plan may be postponed
Nvidia’s acquisition of ARM is expected to be completed in March 2022, but there is also a certain risk of shelving. According to reports, in June this year, a Chinese antitrust lawyer told the Financial Times that the Chinese investigation may cause the transaction to exceed the 18-month window period given by Nvidia in September 2020.
A report published by Reuters in June quoted people familiar with the matter as saying that because European regulators may be reluctant to consider the matter before the end of the summer vacation, this may make it difficult for Nvidia to complete the acquisition before March.
According to the acquisition agreement, the two companies can choose to extend the deadline to September 2022. However, without the permission of the government, either party can announce its withdrawal and terminate the agreement. Cambridge-based ARM sells its semiconductor intellectual property to chip manufacturers around the world. It is regarded as a neutral player and is also known as the Switzerland of the chip industry.
Although NVIDIA has repeatedly insisted that it will not change ARM’s business model, it will also invest heavily in an ARM to help it meet the growing market demand. But some of Nvidia’s competitors disagree. They believe that after Nvidia’s acquisition of ARM, it may make it more difficult for them to obtain ARM’s technology.
At the same time, another semiconductor acquisition in the UK is also under review. British Prime Minister Boris Johnson has ordered National Security Advisor Stephen Lovegrove to review the acquisition of Newport Wafer Fab (NWF), the largest semiconductor wafer manufacturer in the UK.
NWF is being acquired by Nexperia, a wholly-owned subsidiary of China Wingtech Technology, for £63 million. At present, reports from major media do not seem to affect Nvidia’s stock price. On August 4, Eastern Time, Nvidia’s share price was 202.740 yuan, an increase of 2.32%.
