While we normally focus on the technology, to have a holistic understanding of the industry it’s necessary to see the business side as well. While ARM has been an independent company for some time now, today Softbank has leveraged the fall in the value of the British Pound to buy ARM Holdings plc, the company responsible for the ARM ISA, ARM Cortex CPUs and MCUs, Mali GPUs, and numerous other IP blocks that are often used in SoCs today. If you’ve followed our coverage, this isn’t really a surprise, but Softbank is primarily a telecom and internet-centric company with relatively little focus on CMOS chip design.

ARM is valued at 11.89 GBP per share, so to be bought out at 17 GBP per share is a fairly significant premium above the market rate. Looking at past investments it seems that Softbank is no stranger to these kinds of plays but it’s not clear whether Softbank will take a hands-on approach to managing the company or mostly leave ARM to its devices. One option is that they favor a more hands-off approach and ARM is primarily a financial investment for Softbank. It remains to be seen what kind of effect this will have, but the financial backing of a major Japanese conglomerate would likely allow for ARM to devote additional time and resources to designing new architectures to better target high performance mobile and server applications which could impact the industry significantly to ARM’s benefit.

The other option is if Softbank takes a much more hands-on approach to managing ARM, which could be interesting if it helps root out whatever normalized deviance exists in management or engineering at ARM, but could also completely destroy the company if a poor approach is taken. Of course, there’s no way to know what path Softbank will take here, but regardless it’ll be an interesting few years in the semiconductor space.

Source: CNBC

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  • BMNify - Friday, July 22, 2016 - link

    very well for everything except a real floss gfx driver that can then be written for any OS past and future...

    OC the main reason they are taking UK infrastructure today ,besides the lower cost, is that the next US crash is not due until just before november 2016, then they will start taking US stocks and perhaps move it to the UK too for the better £ sterling returns...
  • tipoo - Monday, July 18, 2016 - link

    £24 billion for ARM, AMD would be peanuts for some synergy...
  • JoeMonco - Monday, July 18, 2016 - link

    What would be the point when the x86 cross-licensing deal would become void?
  • tipoo - Monday, July 18, 2016 - link

    Hasn't been the case for years, the agreement is now that the cross licence would be renegotiated "in good faith". Intel would not want to lose 64 bit either after all.
  • JoeMonco - Monday, July 18, 2016 - link

    No, it is true. The agreement becomes completely void with a takeover for both parties.

  • JoeMonco - Monday, July 18, 2016 - link

    Also, Intel would probably heavily lobby to prevent any such acqusition from happening. They're not gonna want to renogotiate a deal with a new party. That whole point of the termination clause is it's basically a poison pill.
  • sorten - Monday, July 18, 2016 - link

    I want to hear more about this normalized deviance.

    And the idea of a corporation making a $24B acquisition to leverage a change in currency values based on a vote that took place two weeks ago is funny. This process started at least 6 months ago.
  • Michael Bay - Monday, July 18, 2016 - link

    It`s the newest trend among plutocrats, haven`t you heard? Blame all your failures on Brexit!
  • jabber - Monday, July 18, 2016 - link

    Well considering that so far about 90% of the Brexit promises were total BS and the top Brexit folks all jumped ship...why not?
  • Michael Bay - Monday, July 18, 2016 - link

    The only promise that matters in the end is sovereignity. Europe can only be healthy as Europe of the nations, otherwise you can see what happens right now - etnomasochistic death from a rapefugee overdose.

    Everything else is superficial, and especially the elites, which ALL should get the rope.

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