Will Qualcomm’s president’s willingness to participate in taking over ARM will make Chinese semiconductors face the “darkest moment”?

NVIDIA (NASDAQ: NVDA) is an artificial intelligence computing company. The company was founded in 1993 and is headquartered in Santa Clara, California, USA. Chinese-American Jensen Huang (Huang Renxun) is the founder and CEO. In 1999, NVIDIA defined the GPU, which greatly boosted the PC gaming market, redefined modern computer graphics, and revolutionized parallel computing. In June 2017, it was selected into the “2017 World’s 50 Smartest Companies” list by MIT Technology Review. After the US stock market closed on July 8, 2020, Nvidia surpassed Intel in market value for the first time and became the chip manufacturer with the highest market value in the United States.

On June 8, Nvidia submitted an application for review to China, hoping that the Chinese government would agree to Nvidia’s acquisition of the British chip company arm. Nvidia is an American company. What impact will its acquisition of British chip company arm have on China?

First of all, the U.S.’s right to speak in the chip field has been further improved. The British chip company arm is not a little-known company. On the contrary, it has a pivotal position in the chip field. 90% of the world’s chips use the company’s authorization. The importance is self-evident, and both Nvidia and British chip arm have business dealings with China. Nvidia is involved in a monopoly industry, so it needs the approval of the Chinese government to make an acquisition.

If the British chip Arm company becomes the possession of the United States, it is easy to use China’s disadvantage in the chip industry to impose some restrictions on Chinese mobile phone and tablet companies, and the development of Chinese companies will be in trouble.

At the same time, the British chip arm company may also change its neutrality in chip licensing. After all, it has become an American company, and the United States can still make a fuss in this regard. The British chip Arm company was acquired by Nvidia, which is obviously a big hidden danger for Chinese mobile phone companies and tablet companies in the future. U.S. chip giant Qualcomm said on Sunday it would be open to investing in ARM if the $40 billion sale of British chip designer ARM to Nvidia is blocked by regulators. Qualcomm will join the rest of the industry in acquiring a stake in Arm if its current owner, SoftBank, decides to take the company public rather than sell it to Nvidia, Qualcomm President and CEO-designate Cristiano Amon said.

“If ARM has an independent future, I think you’ll find a lot of companies in this ecosystem would be very interested in investing in ARM,” Amon said, adding that Qualcomm is “certainly open to that.” , and the company “has held discussions with other companies that share the same view.”

In September last year, Nvidia announced that it would spend $40 billion to acquire ARM. This transaction not only created a record for the amount of semiconductor acquisitions in recent years, but also was extremely influential.

Although ARM does not produce chips, it is the world’s premier supplier of chip architectures. ARM has a monopoly on 95% of the global processor architecture licensing market. The company licenses its chip designs to more than 500 companies that use these designs to Make your own chips. Apple, Qualcomm, Samsung, Huawei and other giants are its customers.

After the announcement of Nvidia’s acquisition of ARM, Qualcomm has been telling regulators around the world that it opposes the deal, as have Microsoft and Google. The companies said they opposed the acquisition on the grounds that it would disrupt the current industry balance, as Nvidia could potentially become a “gatekeeper” to ARM technology and prevent other chipmakers from using the company’s intellectual property.

With the US company Nvidia formally proposed to acquire the British chip design company ARM, this issue has attracted more and more attention from domestic and foreign media. Because, in the past two years, the US government has been using its own domestic laws and technological advantages in the semiconductor industry to get stuck on our “neck”.

From ZTE to Huawei, the ropes of US sanctions are getting tighter and tighter, making it almost impossible for Chinese companies to breathe. At this critical moment, we should and must fight back.

In the acquisition of another important chip company by a US chip giant, China once cast a “veto”. For example, on July 25, 2018, Qualcomm, the world’s largest chip company, wanted to acquire NXP Semiconductors from the Netherlands, which is also one of the top ten chip companies in the world. One-vote veto.

Nvidia has repeatedly stated that it will maintain ARM’s open licensing model and invest heavily in ARM’s headquarters in Cambridge, UK.

But the deal is being investigated by the U.S. Federal Trade Commission, the European Commission, the U.K.’s Competition and Markets Authority and China’s State Administration for Market Regulation. The review process can take as long as 18 months. It is reported that in China, Nvidia’s acquisition application has been submitted in recent weeks.

For Nvidia, the acquisition could also pose risks to its business. 90% of the world’s smartphone processors and other types of mobile chips use chip designs from ARM, which collects royalties.

After the sale to Nvidia, ARM will lose its attractiveness as a neutral supplier, and ARM customers such as Samsung, Apple and Qualcomm will face the situation of its chip rival Nvidia owning ARM, and these companies are likely to turn to other companies. choose.