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Qualcomm has a plan to amass ARM, and it would simply work

Source: Qualcomm

After the failed NVIDIA acquisition, Softbank, the owner of ARM, is still looking to offload a portion of the business to interested parties. Qualcomm appears to be one of those interested parties, and it also has a plan to convince regulators that it would be fair to all of ARM’s partners and other members of the industry.

After the collapse of the $66 billion NVIDIA deal, Softbank decided to go ahead with listing ARM on the New York Stock Exchange, but it raised a lot of concern for industry bodies regarding the company’s future. ARM’s architecture is used in nearly everything today, and it plays an essential role. Its value lies in its patents and designs, valuable to other competing semiconductor manufacturers such as Qualcomm, Samsung, Apple, and NVIDIA.

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Cristiano Amon, Qualcomm’s Chief Executive, told the Financial Times that “[Qualcomm is] an interested party in investing. It’s a very important asset and it’s an asset which is going to be essential to the development of our industry.”

Qualcomm wants to buy a stake in ARM, alongside other competing businesses and create a consortium to keep the business neutral and fair. Qualcomm essentially wants its competitors to line up and invest in ARM, and join the consortium, which could help convince regulators for the deal to go through, eliminating any current concerns about control.

“You’d need to have many companies participating so they have a net effect that Arm is independent.”

Intel, Samsung, TSMC, Broadcom, Qualcomm, Micron and NVIDIA are among the top ten biggest semiconductor companies globally. Suppose these companies could team up and buy a slice of the ARM pie. In that case, it could introduce significant changes in the near future, and it could also convince UK regulators that the future of ARM would be in safe hands, as it would benefit all of the big players in the industry. This also means they’d have to prove that they’d support smaller semiconductor businesses, and still offer similar licensing agreements.

Source: CNN

ARM has been considered an impartial actor in the $500 billion global semiconductor industry, and it has licensing deals and partners with most companies around the world. This led to the company becoming one of the most influential businesses in the world, as most chips use ARM architecture and designs.

“Arm has won everywhere because of the collective investment of the entire ecosystem, from companies like Apple and Qualcomm and many others, and that’s because it was an independent, open architecture that everybody could invest in,”

ARM’s business will only grow larger in the near future as the demand for chips will continue to increase. Electric vehicles already use a lot of chips, and more cars and technologies will be digitized in the future, expanding the reach and ARM’s business significantly. More companies are also moving toward using ARM’s architecture for their processors, simplifying specific processes and accelerating the development. Apple’s latest M1 silicon also relies on the ARM architecture, and it proved to be immensely successful.

Source: Pocketnow

Qualcomm partnering with other semiconductor giants is a little surprising, given that the company has a massive portfolio of patents and designs. Still, it’s not surprising to see the company eye ARM’s business as it could further expand its reach and influence into other markets.

Suppose Qualcomm can get a few other investors. In that case, the deal has a real chance of passing through regulators, offering the company and its partners better licensing agreements, and reducing the cost of developing new technologies.

Nothing is set in stone at the time of writing this, and we’re yet to see a potential deal materialize in the future. Qualcomm reportedly had not spoken to Softbank about a potential investment, but the news confirms that Qualcomm has intentions to get the movement to a new stage. What’s certain is that Qualcomm is open to discussions with ARM and other competitive chip makers, and that it wants to create a consortium of members to stay neutral. Investing in ARM would benefit all semiconductor manufacturers in the world as it would allow the company to spend more on research and development to make new licensable architectures and designs.

What are your thoughts about Qualcomm’s intentions? Do you think that a consortium would ease the regulators’ concerns? Let us know in the comments!

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