Ever since rumors of a potential ARM sale popped up, Nvidia has been floated as the most likely (and most-interested) buyer. That may have changed. Reportedly both TSMC and Foxconn are also interested in ARM.
Both companies are identified as “Key Apple suppliers” in a story at the Nikkei Asian Review, a likely-intentional reference to the company viewed as being behind their newfound interest. Apple doesn’t seem to be making a play for ARM itself, but it might not mind of one of its core strategic partners did. Apparently SoftBank has reached out to both Apple and Qualcomm in addition to Nvidia, TSMC, and Foxconn, but so far Nvidia is the only company we’ve heard much about. Apparently some of the companies (TSMC, Foxconn, Nvidia) have received limited financial data and future projections from ARM to help them better evaluate the company.
Apple reportedly stepped away from the idea, Foxconn and TSMC are still evaluating, and Nvidia is in more advanced talks but would prefer to buy the company outright rather than acquire a stake in it. Samsung has stated it has no interest in acquiring a stake in ARM. Several Chinese firms have also expressed interest, but the chance of this occurring given the current climate between the US and mainland China is more-or-less nil.
“Many tech industry bosses are being approached,” another person familiar with the matter told Nikkei Asian Review. “SoftBank is eager to find new investors as they have their own financial issues and they want to do it as soon as possible. They of course don’t want to face another write-down.”
ARM has recently seen a small decline in its royalty revenue but an increase in licensing revenue. Excluding royalties, ARM earned about 25.2 percent of licensing revenue in 2019.
ARM is locked in a bizarre battle with its own China unit, which SoftBank gave up control of in 2018. ARM China took over all of ARM’s operations and clients in China, but as Asian Nikkei says, “is now openly feuding with its UK parent over management issues.” It’s actually a good deal stranger than that. ARM China’s CEO has refused to leave his position after being fired for a conflict of interest. Allen Wu, then-CEO of ARM China, started a Chinese technology investment fund named Alphatecture that offered its clients discounts on ARM chip designs if they agreed to invest with his fund. Post-firing, Wu has attempted to rally China ARM employees to his side and has refused ARM UK employees accesss to the premises. Just the sort of circus a bright company eager for acquisition wants to be dealing with in front of potential clients.
The sale of ARM to a different company is a major event in semiconductors — akin to Intel granting a new x86 license to a major potential competitor. It’s going to be very interesting to see how this all plays out over the next few months and who ultimately winds up owning the UK-based company.