SoftBank Completes $31 Billion Acquisition of ARM (theverge.com)

Roughly two months later, SoftBank announced today that it has completed its $31 billion acquisition of British chip designer ARM Holdings. The Verge reports: "SoftBank's purchase of ARM is the latest in a line of acquisitions in recent years for the Japanese company, including the $20 billion Sprint acquisition, and a $15 billion investment in Vodafone's Japanese division. ARM is well known for designing chips and licensing them to companies like Apple and Samsung, and ARM-designed chips dominate mobile computing in phones and tablets. 15 billion ARM-designed chips shipped last year alone, and around half of those were in mobile devices. SoftBank is expected to use the ARM deal to bolster its Internet of Things plans."

Comments

Wealth concentration

[rsilvergun]

I wish we'd tax these mega corps more. Ever since the 50's we started dropping the tax rates on the 1%. They've got all the money now and nothing better to do with it besides buy up every company in existence. It makes me laugh when people think a boycott has the slightest difference. Gonna buy from company A instead of B? Go ahead. After 50 years of giving all the money in the world to 1% of the population they own literally everything.

Re: Wealth concentration

[ArmoredDragon]

Given the 1% pay far more taxes than corporations do, I'm not sure what your rant is getting at. And given they earn 19% of the country's AGI while playing 37% of the country's income taxes, I'm not sure I understand the reasoning behind saying that it's unfair, nor do I quite understand why some people write books akin to mein kampf about how much they're perceived to be ruining humanity.

Re: Wealth concentration

[Anonymous Coward]

He's saying that the wealth disparity is harmful, and giving too much power to too little people is not ideal. If you don't understand that, you might want to read up on the economic issues of the early US. Better yet, you might want to study history at any time, and any place.

SoftBank, Arm, & Brexit

[Anonymous Coward]

If Britain loses open access to the EU, how long do you think SoftBank will stay in the UK? SoftBank had made noises about doubling the ARM workforce in the UK in the years after purchase. But with the uncertainty of Brexit, they might want to open a second branch on the Continent where they can maintain EU access.

Re:SoftBank, Arm, & Brexit

[jareth-0205]

If Britain loses open access to the EU, how long do you think SoftBank will stay in the UK? SoftBank had made noises about doubling the ARM workforce in the UK in the years after purchase. But with the uncertainty of Brexit, they might want to open a second branch on the Continent where they can maintain EU access.

Most of ARM's business is done with the far east and States, Samsung, Apple, Qualcomm, etc. ARM was one of the few companies shares that was not hit by the result of the referendum. Now if you want to talk employee access, then that might be more of an issue if a full EU split happens, but trade itself for them is probably not going to be particularly affected.

Re: SoftBank, Arm, & Brexit

[Richard_at_work]

Of course there is the potential that nothing will change - we could exit the EU but retain access to the common market, which means we would still be on the hook for membership fees, unlimited EU migration etc....

You know what would happen if that were the case? The government would lose the next general election. Badly. The sentiment of those who voted for Leave is pretty clear - they don't want unlimited migration (which is a requirement of membership now) etc. Usurp that sentiment and the electorate won't forget.

Re:Number of ARM chips year

[Euler]

15 billion sounds a little high, but not by much. 15 million would absolutely be too low considering the worldwide market, and the wide range of arm processors out there (not all go into phones or tablets.) You probably own dozens of arm processors that you didn't even realize because they are embedded in everything.

This is worrisome

[Snotnose]

You have a company that evidently doesn't know jack shit about technology, buying the #1 technology disrupter in a generation. Softbank knows how to make money in the short term, which is at complete odds of growing a standard to make money long term.

How they gonna get it back?

[backslashdot]

How they gonna get back 31 billion? Since 1 in 7 people will buy a smart phone or gadget every 2 years. That means they gotta get $30 from every smartphone owner just to cover their cost? That's F'd up to say the least. If they increase the cost of an ARM license even slightly it means the smartphone will cost dramatically higher because of the increase in risk capital needed. Basically this deal is terrible for the consumer and probably SoftBank too.

Re:How they gonna get it back?

[UnknowingFool]

How they gonna get back 31 billion? Since 1 in 7 people will buy a smart phone or gadget every 2 years.

ARM processors are used in many devices and not just smart phones. ARM processors range from smartphones to ultra-low power embedded electronics like routers, cars, medical devices, etc.

Depressing for the UK tech industry

[rklrkl]

ARM was a shining light of the the UK tech industry - its clever strategy of licensing its designs without manufacturing them made it a stellar company. Now it's been sold off to a Japanese company-swallowing mega-corporation, so is there a UK-owned equivalent to ARM left in the tech industry? It's a sad say, even if Softbank overpaid somewhat.

Re:Depressing for the UK tech industry

[myrrdyn]

is there a UK-owned equivalent to ARM left in the tech industry?

Imagination Technologies, developer of PowerVR GPUs and owner of MIPS

Even some x86 CPUs contain ARM

[xororand]

AMD's new x86 Zen CPUs contain an ARM based coprocessor.

Zen added the support for AMD's Secure Memory Encryption (SME) and AMD's Secure Encrypted Virtualization (SEV). Secure Memory Encryption is real time memory encryption done per page table entry. This is done utilizing the onboard "Security" Processor (ARM Cortex-A5) at boot time to encrypt each page, allowing any DDR-4 memory (including nonvolatile varieties) to be encrypted. AMD SME also makes the contents of the memory more resistant to memory snooping and cold boot attacks.

https://en.wikipedia.org/wiki/...

Then there are the new ARM-based Opterons.
http://www.amd.com/en-us/produ...

Re:Number of ARM chips year

[fuzzyfuzzyfungus]

ARM presumably makes more money on the big ones, especially if they also license the GPU; but the 'Cortex-M' low power/small size microcontrollers ship in heroic quantities compared to the 'Cortex-A' application processors that actually get mentioned on the spec sheets of various cellphones and tablets. There are also the 'Cortex-R' designs aimed at tasks with hard real time constraints; those are rarely mentioned but ubiquitious in cell modems and the like.

Then you have the 3rd party designs that are ISA compatble rather than directly licenses of ARM designs, Apple and Qualcomm certainly ship a fair few of those.

15 billion may be a bit high; but 15 million probably doesn't even cover a year of new cellphones.

That said, it's exactly this ubiquity and versatility that makes me wonder what SoftBank is thinking in actually buying ARM. ARM does licensing, so if you want a CPU for your application with more customization than just buying a reel of somebody's ready-to-go silicon, they'll sell you a license on pretty favorable terms. Definitely cheaper than paying ~45% over market price to buy out the whole company. If you want the right to do your own thing with their ISA, or want them to design something to fit your particular niche, that'll cost more than a cookie-cutter license; but still substantially less than buying them out.

Plus, since their business is licensing, buying them out is more or less assured to make all their existing customers nervous: what is the new management going to do? Are they going to plunder ARM's design talent for their own pet projects? Start monkeying with license fees, release schedules, etc. to gain competitive advantage for their own products in other markets?

I freely admit that I'm no genius of the silicon supply chain; but my impression was always that ARM's success was a kind of 'for profit development consortium': They aren't running a charity; but they offer solid engineering and reasonable prices to basically everyone who comes knocking, which has made ARM a de-facto standard for a wide range of situations where a company needs a CPU to embed in their product and doesn't want to DIY a proprietary freakshow; or invest the resources necessary to deliver a competitive, updated, SPARC core or the like. Since ARM sells to everyone, they amortize engineering costs across a zillion units; and their licensees can mostly rest easy knowing that ARM, who doesn't have any real direct involvement in selling SoCs or phones, or products in other markets, isn't going to start turning the screws on their licencees in an attempt to boost their own product lines.

This laid-back attitude probably contributed to having a stock price low enough to be an acquisition target; but it also helps them make all the sales they do. If people wanted to deal with an arrogant, dangerous; but very skillful single-source, they could buy Intel silicon. If they wanted to go it alone, SPARC is free for the implementing and MIPS is practically begging people to use their ISA. So far, ARM's combination of greater engineering support than the do-it-yourself options, and greater friendliness and better prices than the Intel options have proven very popular. Now that SoftBank needs to recoup a substantial investment and do whatever they had in mind when the purchased ARM, though, is that state of affairs going to persist?