NVIDIA鈥檚听$40 billion takeover of听Arm is to be investigated by the CMA over competition concerns.听
The听Cambridge-headquartered chipmaker, owned by Japanese giant SoftBank,听revealed in September 2020 that听it had agreed a sale听to the听American听graphics chip specialist.听
The听world鈥檚 largest ever semiconductor deal听is expected听to complete听in 18 months.听
However,听the Competition and Market Authority will start a formal听investigation later this year听and听in the meantime is听inviting听鈥榠nterested third parties鈥� to comment on the impact that the takeover could have on competition in the UK.听
Arm develops and licenses intellectual property听and software tools for chip designs. The products and services supplied by the companies support a wide range of applications used by businesses and consumers across the UK, including desktop computers and mobile devices, game consoles and vehicle computer systems.听
The CMA said it is likely to听consider whether, following the takeover, Arm has an incentive to withdraw, raise prices or reduce the quality of its IP licensing services to NVIDIA鈥檚 rivals.听
Nvidia听says it will retain Arm鈥檚 neutrality听and听keep its IP registered in the UK.听However,听two of Arm’s founders,听Hermann Hauser and Tudor Brown, want听the UK firm听to remain 鈥渘eutral鈥� –听avoiding听a听conflict of interest听whereby听its听clients, which compete with Nvidia for sales,听are听dependent on听a听rival.听听
Adam听Gibson听,听CEO of听Konduit听and VP of听Skymind听Global Ventures, told听老九品茶Cloud听last year: 鈥淭his听[deal]听could be an overstep that lands the company in a mine of regulatory hurdles as it faces competition scrutiny.听
鈥淲e think there鈥檚 a strong possibility that Apple and other Arm听users might move away from Arm听if Nvidia听owns it. One of Arm鈥檚 most attractive features is that its technology is used by all the major chip firms – but if a deal like this goes through, we believe it could be dangerous for players like Apple and Samsung who both deeply customise ARM processors.听听听听
鈥淔or instance, the chips inside an Apple iPhone – like those in nearly each smartphone all over the globe – are based on the instruction-set architectures from ARM.鈥�听
Andrea听Coscelli, chief executive of the CMA,听said:听鈥淭丑别听chip technology industry is worth billions and critical to many of the products that we use most in our everyday lives. We will work closely with other competition authorities around the world to carefully consider the impact of the deal and ensure that it doesn鈥檛 ultimately result in consumers facing more expensive or lower quality products.鈥�听
The UK government is also scrutinising whether the deal should be blocked in the public interest or for cyber security reasons.听