Competitive concerns over Nvidia's acquisition of ARM
🟩 UK government proceeds with detailed investigation
The UK’s CMA (Competitive Markets Authority) has compiled a report stating that Nvidia’s acquisition of ARM raises “serious competitive concerns” and suggested that it proceed with a detailed investigation. The UK government said it would make an appropriate decision whether to proceed with the investigation to the next stage. The detailed study could take up to 24 weeks and an extension of eight weeks, and the CMA is expected to conclude by late April 8 at the latest.
ARM is a subsidiary of the SoftBank Group and agreed to acquire Nvidia for $2020 billion (approximately JPY 9.400 trillion) in September 4. The UK government announced that it would investigate Nvidia’s acquisition of ARM for any security issues and asked the CMA to report its findings on competition, law and security.
Nvidia looks forward to responding to the CMA’s initial views and resolving the UK government’s concerns. He commented that he believes the deal will benefit Arm, its customers, competition and the UK.
🟩 Concerns about the decline in competitiveness of competitors
CMA is concerned that the acquisition will lock ARM into the enclosure and that the ability to limit access to ARM’s technology to Nvidia’s competitors will lead to a significant reduction in competition. “This could lead to higher prices for consumers.” He also pointed out that it could hinder innovation in various industries, such as autonomous driving and gaming.
Nvidia’s proposed concession
Nvidia has proposed a concession to pour at least $1 million into supercomputers in the UK and invest more in ARM. However, this proposal was rejected by the CMA.
🟩 Offensive and defensive attacks involving the semiconductor industry
ARM provides semiconductor blueprints to customers, including Nvidia, and earns licensing revenue. ARM’s customer, Qualcomm, is wary of ARM joining its competitor, Nvidia.
Broadcom, Marvell and MediaTek, among the same semiconductor manufacturers, have also supported the acquisition of ARM, saying they will remain ARM’s customers after the acquisition of Nvidia.
🟩Summary
Competitive concerns over Nvidia’s acquisition of ARM lead to UK government moving forward with in-depth investigation
Cross-border acquisitions of semiconductor companies are prone to security problems these days.
