NVIDIA wants to buy ARM from Softbank and we are not surprised because the British firm is a “treat” for any shark. At the moment there is talk of «reflection» and «exploration of options», but to confirm it would be an operation of great significance in the technology industry.
Ordinary users know NVIDIA for its dedicated graphics cards for games, but today the green giant is much, much more. Recently, we count on how it had surpassed Intel in market capitalization to become the most important American semiconductor company in that section and third in the world after Samsung and TSMC.
In line with this, our colleagues at MCPRO published the special “Companies with a history: How NVIDIA has conquered the data center”, which we recommend if you want to delve into what a company that started in 1993 as a “simple” has become graphics chip producer.
ARM, object of desire
ARM Holdings is today a company essential for the industry. It all started with the development of an RISC-based architecture in the early 1980s by Acorn Computer. In its development, Apple itself became involved soon after, until Acorn, fearing that the involvement of a hardware producer like Apple would back out the rest of the manufacturers to use their developments, decided to create a new company Advanced RISC Machines (ARM) in charge of the product design of this architecture.
ARM today, has licensing agreements with hundreds of manufacturers and its architecture designs are present in billions of devices, in 100% of smartphones sold on the planet, but also in other mobile devices, personal computers, embedded and servers for data centers that is precisely the main interest from NVIDIA.
This is the explanation that a company that does not produce or sell any product has such a high valuation. In addition, projects such as the recent Apple silicon, by which the Cupertino firm will replace the Intel x86 processors used in the Mac with a new architecture that, although it has not been mentioned, will correspond with total security to ARM, has the potential to end the x86 empire that has dominated the computer age since the 1980s.
NVIDIA wants to buy ARM
Softbank paid a whopping $ 32 billion to acquire ARM Holdings in 2016. The Japanese conglomerate wanted to monetize the operation from the start and pressured ARM to increase the price of the licenses it sells to manufacturers, its main source of revenue.
It does not seem to have been enough and at the beginning of this month information came from the CEO of Softbank and ARM president, Masayoshi Son, considering the sale of the company. Softbank had reportedly hired Goldman Sachs to explore ARM’s put options. It didn’t take long for the first giant to respond. Always according to rumors because there has been no official confirmation as usual. Neither denied …
NVIDIA’s ambitions do not rest, although it remains to be seen what type of operation it can carry out considering that the valuation of ARM has continued to increase since 2016 and is likely to reach $ 40 billion. The reaction of other manufacturers can also be problematic, some NVIDIA competitors and dependent on ARM designs. To be continue.