Qualcomm eager to invest in Arm alongside rivals in upcoming IPO

U.S. chipmaker Qualcomm wants to buy a stake in Arm along with its rival and create a consortium to keep British chip designers neutral in the competitive semiconductor market.

Japanese conglomerate SoftBank Plans to list Arm It is listed on the New York Stock Exchange after a failed $66 billion takeover by Nvidia earlier this year. However, the IPO has raised concerns about the company’s future ownership given its pivotal role in the global tech space.

“We are interested in investing,” Qualcomm CEO Cristiano Amon, told the Financial Times. “It’s a very important asset and it’s vital to the growth of our industry.”

He added that Qualcomm, one of Arm’s biggest customers, could join forces with other chipmakers to acquire Arm outright if the consortium making the acquisition is “large enough.” Such a move could address concerns about Arm’s corporate control after an impending IPO.

“You need to have a lot of companies involved so they can have the net effect of Arm independence,” he said.

Founded and headquartered in the UK, Arm was listed in London and New York before SoftBank bought it for £24.6bn in 2016, despite widespread fears that Britain’s most successful tech company would fall into foreign hands.

Some British politicians have called on the government to buy Arm’s “golden share”, which would recognise the company’s status as a key strategic asset for the country.

But despite intense British lobbying, SoftBank is believed to be pushing for a U.S. listing, raising questions about control of what has long been a $500 billion global “Swiss” company. semiconductor industry. Arm has licensing agreements with partners regardless of size or geography, which results in its intellectual property being used in most chips sold globally.

Amon’s intervention will give new impetus to the idea of ​​a consortium of chipmakers becoming Arm’s cornerstone investors. Intel CEO Pat Gelsinger said the U.S. chipmaker could back the move earlier this year.

Qualcomm opposed Nvidia’s proposal to buy Arm, claiming it doesn’t make sense for a chipmaker to control a company of fundamental value to the entire industry.

“Arm has won on every front because of collective investment across the ecosystem, from companies like Apple and Qualcomm and many others, and that’s because it’s an independent, open architecture where everyone can invest ,” Amon said, referring to the period before SoftBank bought the company.

With demand for semiconductors set to double over the next 10 years, and as the world struggles to recover from a multi-year chip crisis, technology makers in all modern electronics will rely on Arm’s designs more than ever.

“When we look at it today, I think the trend is that everything is moving to Arm,” Amon said, referring to the recent expansion of chip IP designers from mobile phones to automotive, IoT and data centers.

After several years of low returns, Arm reported record annual revenue of $2.7 billion in 2021, up 35% from the previous year. Revenue from its licensing business rose by nearly two-thirds, and royalties rose by a fifth to $1.5 billion.

Amon said Qualcomm has not spoken to SoftBank about a potential investment in Arm.He added that the Japanese team has been prioritizing solutions Arm’s renegade Chinese unit is deadlocked.

Arm China CEO Alan Wu has effectively controlled the unit, but has sparred with its U.K.-based parent company as well as SoftBank.

However, recent official Chinese records show that Wu has been fired from all positions at Arm China, paving the way for Arm’s IPO.

Amon said investing in Arm alongside competitors will “support a successful IPO and valuation” and ensure the company continues to “work hard and invest.”

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