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Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

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Re: Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

#201

Post by volta83 »

tokyojoe wrote: post #160
tw04 wrote: post #123

Earlier quoted context omitted.

> these companies will simply hollow ARM out (slash R&D, cut staff etc) to pump up the target’s value, before flogging it off or breaking it up. That's a very real concern with Softbank (and why I questioned why regulators were allowing the acquisition in the first place). I don't think you can be any further from the mark implying that's Nvidia's plan. Nvidia wants ARM to flourish, they would have no interest in kil…

This reminds of the analyst who predicted AMD’s acquisition of ATI would kill off Intel. Nothing of the sort happened. If a chip supplier like Nvidia buys ARM and uses its products, it will ultimately have an outsize say over ARM’s product (actually IP) roadmaps. That’s not going to make ARM’s current customers happy. Nvidia want to diversify- that’s why they’ve targeted ARM. They don’t need the technology- it’s read…

> why buy ARM and almost certainly damage the ARM business model which is as an independent processor IP provider?

That's the 40 billion dollar question, isn't it. Why are they doing this?

I don't know, I guess they know something that I don't.

What do you know that we don't ? :D

> For ARM, it’s a strategic disaster IMV. Better to stay independent!

How do you arrive at this conclusion?

For all we know NVIDIA might (1) invest a lot more money into ARM, (2) improve their ecosystem, (3) start licensing their IP to third parties as well using a similar model to ARM, (4) start contributing more to open source like ARM does, etc.

Re: Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

#202

Post by tokyojoe »

volta83 wrote: post #159
tokyojoe wrote: post #52

The semiconductor supply chain is now almost completely disaggregated ie everyone specialises in just a small part of the value chain. ARM’s speciality is in CPU design and it has carved out for itself the enviable position of being the defacto standard for mobile applications - almost every single phone on the planet has ARM processor(s) running it. And their products are in dozens of other end applications segments…

You claim that it is in the interest of an ARM CPU vendor that wants to buy ARM to cut ARM's R&D and sell it for parts after buying it. What's the rationale of this claim? (you don't say) I'd expected that ARM CPU vendors are interested in having "great" CPUs to sell and having as big of an ecosystem as possible. So my expectation would be that NVIDIA would significantly increas - not cut - ARM's R&D budget, and will…

Nvidia don’t need ARM in-house to be successful. They already are. They are overvalued and have a huge mkt cap and are looking to make an acquisition as a result. Ultimately, the stock market will decide what Nvidia does with ARM. The pressure to deliver Q on Q improvements is immense. And re slashing and burning, it happens all the time in semiconductors. When you make an M&A, the first thing you look for are cost reduction opportunities because that’s one of the P&L drivers which in turn drives stock price (supply shortages notwithstanding). As for synergies (the other big thing in an M&A) I just don’t see any. If ARM goes to Nvidia it will be a disaster for ARM. Herman Hauser, ARM’s founder (now retired) has said as much. He was very unhappy about the SoftBank deal as well.

Re: Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

#203

Post by tester34 »

ericmay wrote: post #93
tester34 wrote: post #37

Earlier quoted context omitted.

>Seems to be the strongest/easiest route to go to justify blocking it. The whole national security angle and all. What makes you think so? So Intel - US / TSMC - Taiwan can be considered as national security, but ARM not?

Could you elaborate? I guess my thinking is similar to if someone wanted to try and buy Intel. The U.S. would probably stop it on national security grounds. I hope that makes sense - at least where I was trying to go with that comment. Maybe it's incorrect or not well thought out but I'd at least like to make my point clear :)

I thought you wanted to say that they wanted to block it, but had no solid reason, so picked "easiest" route and blocked it on national security grounds

Re: Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

#204

Post by tokyojoe »

foobarian wrote: post #105
zepto wrote: post #99

Earlier quoted context omitted.

> if ARM was this awesome design shop owning essentially all mobile chipsets and then some, why did they need the money? Were they going broke? It’s not the company that gets the money - it’s the owners. This transaction is about SoftBank’s balance sheet, not ARMs.

I was thinking more about the original sale. It's looking like it was just the board seeing dollar signs, coupled with a promise of a huge workforce expansion. [1] https://www.borntoengineer.com/britains-successful-technolog...

That’s exactly what it was - an opportunity to cash in. The other side of this coin is when you have supply shortages and/or a stock mkt run as we now have, some companies end up with huge mkt caps and are able to make purchases like this one. There is an argument that says it’s destructive in a bad way (not Schumpeter’s ‘creative destruction’) because ultimately it reduces competition and innovation.

Re: Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

#205

Post by LatteLazy »

nabla9 wrote: post #194
LatteLazy wrote: post #181

Earlier quoted context omitted.

I'm confused why China get a say? ARM is UK, Softbank is Japan and Nvidia is US, why do the Chinese have a claim? Is it just because no one wants to upset them?

Nvidia gets more revenue from China+HK than they get from the US. China is huge market for both ARM and Nvidia. Nvidia don't want to buy a company if they can't sell to Chinese market.

Fair enough. I didn't realise China were such a big market for them. Thanks!

Re: Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

#206

Post by caslon »

happymellon wrote: post #162
caslon wrote: post #135

Earlier quoted context omitted.

ARM also gives the UK strategic leverage in any trade negotiations. Would we knowingly allow Rolls-Royce Jet Engines to be flogged off? No. Ditto ARM. Doesn't this/shouldn't this basically encourage countries like the United States to completely ignore intellectual property laws? If not, why not?

Because then people would ignore their IP rules. Which would probably be pretty devastating for high profile things like Silicon Valley and Hollywood.

People already do ignore US IP law. It's pretty much entirely ignored by the single other meaningful competitor in the world: China.

Re: Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

#207

Post by dash2 »

yodelshady wrote: post #199
dash2 wrote: post #68

Earlier quoted context omitted.

Perhaps more that times have changed. We used to have a strong commitment to the neoliberal ideal of a separation between state and business. The experience of nationalisation had also not been good (think Austen and BT). That’s changed and we are now in the world of “entrepreneurial states” for better or worse.

Coming from a 5G thread, this sounds sensible to me. We've seen an enormous hollowing out of institutional competence since the rise of Free Trade At All Costs.

Hmm. Thinking of the UK in the 1970s, "institutional competence" is not the word that springs to mind. But, yeah, there are definitely reasons why the world has got more nationalist, and if everyone else is doing it, to some extent we have to follow suit. Of course, the UK is not a continent-sized economy like the US or China, and has to be a bit more free-trade-oriented than they are.

Re: Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

#209

Post by volta83 »

tokyojoe wrote: post #202
volta83 wrote: post #159

Earlier quoted context omitted.

You claim that it is in the interest of an ARM CPU vendor that wants to buy ARM to cut ARM's R&D and sell it for parts after buying it. What's the rationale of this claim? (you don't say) I'd expected that ARM CPU vendors are interested in having "great" CPUs to sell and having as big of an ecosystem as possible. So my expectation would be that NVIDIA would significantly increas - not cut - ARM's R&D budget, and will…

Nvidia don’t need ARM in-house to be successful. They already are. They are overvalued and have a huge mkt cap and are looking to make an acquisition as a result. Ultimately, the stock market will decide what Nvidia does with ARM. The pressure to deliver Q on Q improvements is immense. And re slashing and burning, it happens all the time in semiconductors. When you make an M&A, the first thing you look for are cost r…

> Nvidia don’t need ARM in-house to be successful. They already are.

You keep saying this, but this still does not match the reality that Nvidia has bid a lot of money for ARM.

So there must be something "in" for them that makes it worth it for them to pay 40 billion dollars.

The claim that this deal will be a disaster for ARM is IMO equivalent to saying that "killing ARM is worth 40 billion dollars to NVIDIA".

That makes no sense, at all. The only reason ARM is worth 40 billion dollars is because of its users. If ARM loses its user base, it is worth as much as MIPS or OpenPOWER (aka 0 dollars).

Also, if ARM loses its user base, NVIDIA ARM CPUs become worthless.

I have a hard time believing that, after investing 15 years of R&D into their own ARM CPUs and finally shipping serious ARM CPUs to market, NVIDIA would pay 40 billions to make that all worthless.

Re: Proposed acquisition of ARM Limited by NVIDIA: public interest intervention

#210

Post by nottorp »

klelatti wrote: post #179
nottorp wrote: post #147

Earlier quoted context omitted.

How about more basic things: From now on, every ARM processor costs $40 per chip to license. Except, of course, those made by NVidia. or From now on, all improvements to the reference ARM architecture will only be available in NVidia chips for the first two years. Afterwards they'll be available for licensing at the current costs. Those are monopoly issues. And now a national security issue: From now on, $RANDOM_EURO…

Which is why there are distinct competition investigations going on in UK, EU and elsewhere. I think you're overdoing the last point: there is lots of key technology licensed from US firms and no-one in the UK thinks that this is a major national security issue. Much more likely that there is a specific issue that UK government has identified that poses a realistic problem for UK security services.

> no-one in the UK thinks that this is a major national security issue.

"says" yes... "thinks"... you don't know. I would think it if i were them.

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