Because the EU will scrutinize the American Nvidia for the acquisition of Arm
According to the Financial Times, an EU investigation into the acquisition of the chipmaker Arm by Nvidia will start in September
American Nvidia will not get its hands on the semiconductors of Arm, the jewel of the British technology industry and neutral provider of technology across the chip industry, so quickly.
Brussels in September will launch a formal investigation into Nvidia's acquisition of British chip maker Arm, bought for $ 54 billion by SoftBank, the Japanese investment conglomerate. The Financial Times reveals it. The investigation will cover possible distortive effects on the market and competition in the sector.
The investigation, the London financial daily specifies, will begin after the American giant officially notifies the European Commission of its plan to acquire Arm. The US chipmaker announced that he will make his presentation after September 6, people close to the deal told the FT.
The transaction must receive regulatory approvals from the United Kingdom, the European Union, the United States and China.
The move by Brussels comes after the London government also launched an investigation into the acquisition last May, announced on 13 September by the American giant .
WHY THE EU WILL INVESTIGATE NVIDIA'S OPERATION WITH ARM
The Brussels investigation comes after the UK's Competition and Markets Authority (CMA) said its initial assessment of the deal suggested that there were "serious competition concerns" and that a number of remedies suggested by Nvidia it wouldn't be enough to deal with them.
THE POSITION OF THE BRITISH COMPETITION AUTHORITY
The CMA last week recommended a thorough investigation into the deal , but the UK may also decide to block the takeover for national security reasons.
The UK authority fears that the merged business will damage the competitiveness of Nvidia's rivals by limiting access to Arm's intellectual property. Arm's technologies are used by companies that make semiconductor chips and related products, competing with Nvidia. Arm estimates that 70% of the world's population uses Arm-based technology.
According to the CMA, the acquisition could stifle innovation in numerous markets, including data centers, games, the Internet of Things and autonomous cars. This could result in more expensive or lower quality products for businesses and consumers.
WHAT DOES THE BRITISH ARM
Founded in 1990 in England, Arm specializes in microprocessors with an overwhelming global market share in the smartphone industry. Its chips, manufactured under license, are also found in countless sensors, connected objects and cloud (remote computing) services.
It is headquartered in Cambridge, but also has offices around the world, including a joint venture in Shenzhen, China. SoftBank Group acquired 100% of Arm in 2016 for approximately $ 31 billion.
Arm has unprecedented reach as a provider of designs and intellectual property to most of the global semiconductor industry. The company licenses its technology to customers such as Intel, Qualcomm, Huawei and Samsung Electronics who are increasingly competing with Nvidia.
BECAUSE CHINA IS ALSO LOOKING AT THE OPERATION
As written at the beginning, Nvidia's acquisition of Arm will also have to receive approval from the Chinese authorities.
Arm has in fact a joint venture called “Arm China” with the Chinese private equity firm Hopu Investments. Arm China is headquartered in Shanghai, which means that the Chinese Ministry of Commerce and the Chinese State Administration for Market Regulation will have the right to review the proposed Nvidia deal.
Nvidia is an American company, and although Arm is British, the acquisition would turn Arm into an American company, making it subject to US law. Rising Sino-US tensions could reduce China's ability to use Arm's key projects.
Considering how dependent the Chinese market is on Arm (the main component of Huawei products), if Arm were under US control, a single export ban could cripple a sizable portion of the Chinese electronics market. While China is trying to fight this addiction by developing RISC processors and its own software platforms (such as Harmony OS), it is still years away from replacing Arm technology.
WHO PROTESTS AGAINST THE ACQUISITION
Not only the regulators, even the industries look suspiciously at the operation.
Rival chip companies immediately objected to the deal, noting that Arm's chip designs are widely licensed and, in the event of a takeover, Nvidia would have the power to stop rivals from using Arm technology, which is why. which the US company has denied.
THE LOCATION OF NVIDIA
"This transaction will be beneficial to Arm, its licensees, the competition and the industry," said Nvidia. "We look forward to engaging with the European Commission to explain the transaction and address any concerns they may have."
THE COMMENT OF THE ANALYSTS
"Nvidia is looking to buy a company that is putting its chips in virtually 95% of phones around the world," said Logan Purk , senior analyst at Edward Jones. "This scares many governments as there would be a US company that could essentially control the entire chip market."
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/perche-ue-scrutera-acquisizione-di-arm-di-nvidia/ on Fri, 27 Aug 2021 09:25:07 +0000.