December 4, 2020


Nvidia to buy ARM Holdings from Softbank

Image source: Mike Blake/Reuters

Wall Street Journal reported on Saturday, the possibility of Nvidia buying the British chip designer ARM Holdings from the SoftBank group in a deal worth $40 billion in cash-and-stock. Nvidia, which was earlier known only for it’s graphic processors, now also has chips being used for High Performance Computing in Data Centers and AI calculations. ARM Holdings is a chip designer which supplies it’s basic design on license basis to different companies for production. By focusing on less energy demanding chipsets, ARM was able to lure companies such as Apple and Samsung to get longer battery life on their devices.

Image source: Mike Blake/Reuters

SoftBank acquired ARM in 2016 for $32 billion, but had a lot of problems seeing growth in the business, as reported by WSJ. With plummeting stock prices, the Japanese conglomerate decided to let go of several company assets to buyback the stocks and Nvidia took the opportunity to try and grab ARM. This transaction is believed to be the biggest deal in the semiconductor world, ever. Nvidia observing a steady growth during the entirety of the pandemic, upon acquiring ARM will become a chip-superpower. Nvidia had previously said that they were looking forward to working with ARM to produce supercomputers to work on real-life problems.

ARM has till date been a neutral suplier to all the chip companies that use it’s designs, which might change as Nvidia (a chip manufacturer itself) starts to own the company. This might lead to some problems with ARM’s current customers. However, if the deal goes through smoothly, Nvidia and SoftBank are definitely in for a win. Nvidia will become an even more dominating name in the industry with new business of providing chips to current customers of ARM Holdings. Apple, which recently decided on using ARM based processors in their devices (and ending ties with ARM competitor Intel), is one such customer.