Cristiano Amon emphasizes the importance of the chip designer for the entire IT industry and once again brings a consortium into play that ARM could also take over entirely.
The US chip manufacturer Qualcomm continues to seek a stake in British semiconductor designer ARM. “We’re interested in investing,” Qualcomm CEO Cristiano Amon told the Financial Times. ARM plays an essential role in the development of the entire industry. Amon also revived the idea of a consortium that could acquire a strategic stake or take over ARM entirely.
The multi-core processors for smartphones and tablets sold by Qualcomm and other manufacturers such as Mediatek or Samsung are based on those developed by ARM designs. Apple no longer only uses the ARM architecture for iPhones, but also in the M1 processors for Macbooks and iMacs. In addition, ARM designs are used for server processors, for example by Amazon or Ampere – and have also arrived in supercomputing.
Independence in danger
“If we look at the trend today , I think that everyone relies on ARM”, Amon describes the central strategic role of the company for the entire semiconductor industry. The fact that ARM owner Softbank wants to list the chip designer on the stock exchange is not only observed with a certain amount of nervousness at Qualcomm. The industry fears for ARM’s independence.
In 2016, the Japanese mobile phone group Softbank took over ARM for 24 billion pounds (the equivalent of almost 29 billion euros at the time). In 2020, the Japanese wanted to sell their British subsidiary again and came to an agreement with the US graphics chip manufacturer Nvidia. The partly share-based deal was initially priced at around US$40 billion (€37 billion), but grew to US$66 billion after the price gains in Nvidia shares before it burst.
Softbank had encountered considerable resistance from regulators, industry representatives and the British government when it was sold to Nvidia – and finally withdrew. Instead, ARM is now to be taken public; the IPO is planned for spring 2023. Amon sees this as an opportunity for several partners to participate in ARM and thus ensure the independence and openness of the chip designer.
The Qualcomm boss is now again bringing up the idea of a consortium that strategically ARM could participate. That could both “support a successful IPO” as well as ensuring ARM invests and evolves, Amon told the Financial Times. But this requires broad support from the industry: “Many companies would have to participate in order to ultimately achieve independence from ARM.” If the consortium is ‘big enough’ is, a takeover would also be possible, says Amon.
Consortium is taking shape
The Qualcomm boss had already proposed a consortium when it became foreseeable that the sale to Nvidia would burst could. There is interest in the industry. Intel boss Pat Gelsinger was open to participating in a consortium in February. “Should such a consortium arise, some kind of participation would probably be very advantageous,” Gelsinger told the Reuters news agency.
The South Korean chip manufacturers Samsung and SK Hynix had also already spoken out in favor of ARM being part of a consortium should be carried with the broadest possible support. This should also meet possible antitrust concerns. “We don’t believe that ARM should be bought by a single company,” said SK Hynix CEO Park Jung-Ho.