Nvidia's plans to acquire leading smartphone UK chip designer Arm look to be unraveling
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Nvidia’s plans to acquire UK-based chip designer Arm looks like it could be in serious trouble on multiple fronts. Arm designs the architecture that underpins almost the entire smartphone market globally, with key licensees including Apple, Qualcomm, Samsung, MediaTek and others. Nvidia also currently licences and designs its own SoCs predominantly for the automotive industry, but also for Nintendo’s Switch console and data centers.
The latest potential roadblock to the US$40 billion deal is a security assessment recently completed by the UK government that raises national security concerns. According to Bloomberg, the UK government is leaning towards rejecting Nvidia’s bid to buy Arm from current owner, Japan’s SoftBank. However, it is possible the UK government could still give the deal the go ahead if certain conditions are met.
Earlier in the year, Qualcomm lodged its objections to the deal as it views Nvidia as being a competitor in the Arm-based SoC market and, naturally, doesn’t want to see Nvidia gain a competitive advantage from the deal. Qualcomm also claims it is possible that Nvidia could even go as far as to terminate its current licensing deal, should the deal go ahead. Regulators in other countries are also scrutinizing the deal closely with the European Commission, another potential hurdle for Nvidia that may prove insurmountable.