Nvidia is set to acquire Arm Holdings, one of the world’s leading game chip developers, from SoftBank Group for $40bn. The deal is expected to close in early 2022, subject to regulatory approval, and will constitute one of the largest in the semiconductor industry. The acquisition is predicted to have a significant impact on the sector, with Nvidia gaining access to new markets and customers while consolidating its position in the gaming and mobile computing markets. Nvidia’s CEO, Jensen Huang, said the deal would “accelerate our growth and pursuit of new markets.”
NVidia to Acquire Leading Game Chip Developer for $40 Billion
NVidia, the American multinational technology company, has announced that it will acquire Arm Holdings, one of the world’s leading game chip developers, for $40 billion. The acquisition is expected to be one of the largest in the semiconductor industry, and it is expected to close in early 2022, subject to regulatory approval.
About NVidia
NVidia Corporation is an American technology company that specializes in the design of graphics processing units (GPUs) for gaming and professional markets, as well as system on a chip units (SoCs) for the mobile computing and automotive markets. It is headquartered in Santa Clara, California and has offices worldwide.
About Arm Holdings
Arm Holdings is a British semiconductor and software design company that specializes in the development of microprocessors, system-on-chip designs, and related technology for mobile and embedded systems. It was founded in 1990 and is headquartered in Cambridge, England. The company was acquired by SoftBank Group in 2016 for $31 billion.
The Acquisition Deal
The acquisition deal will see NVidia acquire Arm Holdings from SoftBank Group for $40 billion. The deal includes $21.5 billion in NVidia common stock and $12 billion in cash, which SoftBank will receive at closing. The remaining $6.5 billion in cash will be paid to Arm employees in the form of equity or cash incentives. SoftBank will retain a 10% stake in Arm, and NVidia will also commit to supporting Arm’s existing business model and customer relationships.
The Impact on the Industry
The acquisition of Arm by NVidia is expected to have a significant impact on the semiconductor industry. As one of the world’s leading game chip developers, Arm’s technology is used in a wide range of devices, including smartphones, tablets, and gaming consoles. By acquiring Arm, NVidia will gain access to new markets and customers, while also strengthening its position in the gaming and mobile computing markets.
The Reaction of the Companies
The acquisition has been welcomed by both companies, with NVidia CEO Jensen Huang stating that “Joining forces with Arm will enable us to accelerate our growth and pursue new markets.” SoftBank Group CEO Masayoshi Son added that “This transaction brings together two world-class companies that share a vision for the future of computing.”
The Reaction of Industry Experts
The acquisition has also received positive reactions from industry experts, who believe that the deal is a smart move for NVidia. Dan Ives, Managing Director of Equity Research at Wedbush Securities, stated that “We view the move as strategically smart for NVidia as it will give the company a key leadership position in the semi market and will help drive significant growth in the years ahead.”
The Future for NVidia and Arm
The acquisition of Arm by NVidia is expected to lead to new opportunities and growth for both companies. With NVidia’s resources and expertise, Arm will be able to accelerate its development of new technologies and expand into new markets. Meanwhile, NVidia will benefit from Arm’s existing customer relationships and its leadership position in the gaming and mobile computing markets.