UK worries over chipmaker mega buyout

Nvidia controlling Arm could create real problems for Nvidia’s competitors by limiting their access to key technologies and ultimately stifling innovation in a number of important and growing markets. AFP / File

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Nvidia controlling Arm could create real problems for Nvidia’s competitors by limiting their access to key technologies and ultimately stifling innovation in a number of important and growing markets. AFP / File

Britain said on Friday that a plan to buy chip designer Arm by US company Nvidia raised “serious competition concerns,” while the deal could still be considered for security reasons.

Japanese group SoftBank revealed nearly a year ago that it was selling British firm Arm for up to $ 40 billion (€ 34 billion) in a deal it hoped to close early. 2022 following competition reviews in multiple jurisdictions.

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Following its own investigation, the UK Competition and Markets Authority highlighted concerns which included possible increases in semiconductor prices, already facing a global shortage due to the pandemic and particularly affecting the automobile sector.

“We are concerned that Nvidia controlling Arm could create real problems for Nvidia’s competitors by limiting their access to key technologies and ultimately stifling innovation in a number of important and growing markets,” said Andrea Coscelli, Managing Director from CMA, in a press release.

He noted that the chip technology industry was “vital” to everyday products.

“This includes critical data processing and data center technology that support digital businesses across the economy, as well as the future development of artificial intelligence technologies that will be important to growth industries like robotics and self-driving cars, ”Coscelli said.

The CMA said it had reported its takeover concerns to the UK government’s digital industry affairs department and argued that “a full investigation of the deal … is warranted on the grounds of competetion”. The watchdog has meanwhile confirmed that the takeover could still be the subject of a full investigation in the UK on national security grounds.

It comes as Britain this week ordered an investigation into the takeover of British defense technology company Ultra Electronics by US Cobham in order to assess security risks.

In a statement released on Friday, Nvidia said it looked forward to the opportunity to present “the initial views of the CMA and resolve any concerns the government may have,” adding that it remains confident that the ‘deal “will be beneficial to Arm, its licensees, competition and Great Britain.”

Founded in 1990, Arm specializes in microprocessors and dominates the global smartphone market. But its chips are also found in sensors, smart devices and cloud services.

Nvidia, known for its favored graphics cards in the video game industry, saw sales skyrocket during the coronavirus crisis, with gaming being a popular hobby on lockdown. SoftBank bought Arm in 2016 for $ 32 billion.

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