Softbank said on September 14 local time that it would sell arm, a British chip design company, to NVIDIA, an American chip company, for $40 billion, AFP reported. If the deal is approved, it will become one of the largest acquisitions in the history of the semiconductor industry and will push NVIDIA to the forefront of the semiconductor industry.
Under the agreement, NVIDIA will pay Softbank $21.5 billion in common stock and $12 billion in cash, of which $2 billion will be paid immediately upon signing the agreement, NVIDIA said in a statement. Softbank could also get up to $5bn in cash or equity, depending on arm's results. At the same time, NVIDIA will issue $1.5 billion in shares to arm employees, with a total deal of up to $40 billion.
Softbank said it believed arm and NVIDIA would perform better after the merger, and the sale of arm would "help increase the value of our company to shareholders.". The deal also needs to be approved by a number of jurisdictions, including the UK, China, the US and the European Union, the group said. The company added in a statement that it hopes the deal will be completed around March 2022.
NVIDIA said the acquisition would help "build the leading computing company in the era of artificial intelligence" and would combine its leadership in artificial intelligence with arm's huge computing ecosystem to drive innovation for all its customers. NVIDIA also said arm would retain its name and remain in Cambridge, UK, where a new centre of global AI excellence will be established.
NVIDIA is one of the largest computer chip companies in the world, specializing in chips for computer graphics, games, automobiles and artificial intelligence, as well as data centers. During this year's epidemic, NVIDIA's sales soared due to the popularity of games and so on. As of September 11, its total market value exceeded $300 billion, nearly $100 billion higher than Intel, the long-term leader of chip technology. NVIDIA is also one of the best performing companies in technology stocks this year.
Arm company was founded in 1990 in the UK, mainly selling chip design technology licensing. Its chips are also used in sensors, smart devices and cloud services. Among them, Samsung Electronics, apple, Qualcomm, Broadcom, Intel, etc. are major customers authorized by ARM technology. They either use arm's design as the basis for their own chip development, or get their instruction set authorized for proprietary work. In 2016, Softbank acquired arm at a price of US $32 billion. Previously, Softbank president sun Zhengyi hoped to fully enter the Internet of things, 5g and other mobile communication and artificial intelligence industries with the help of arm.
Some analysts point out that NVIDIA's acquisition of arm will further shuffle and integrate the chip industry. At the same time, the combination of NVIDIA and arm has undoubtedly formed a tripartite pattern with Intel and AMD, making the competition in high-performance servers, data centers and other fields more intense in the future.