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SoftBank To Buy British Chip Designer ARM For $32 Billion (cnet.com) 153

Posted by msmash from the big-money dept.
SoftBank has agreed to acquire British chip designer ARM Holdings for $32 billion in cash. The purchase will give Japan's multinational telecommunications and Internet corporation a slice of virtually every mobile computing gadget on the planet and future connected devices in the home. ARM, unlike Intel, doesn't manufacture chips, but licenses the design for it. ARM customers shipped roughly 15 billion products with ARM chips inside in 2015. This also marks the first large-scale, cross-border transaction in Britain since it voted to exit the European Union last month. "I have admired this company for over ten years," SoftBank Chief Executive Officer Masayoshi Son told reporters at a press conference in London on Monday. "This is an endorsement into the view of the future of the U.K."

ARM assumes the tentpole position in chips for mobile devices. It was one of the first companies to aggressively focus on mobile devices while other semiconductor companies were ramping up their efforts on desktops. SoftBank, which is based in Tokyo has become one of the most acquisitive companies in the recent years. It heavily invests in technology, media, and telecommunications companies. ARM could provide an additional boost to SoftBank's mobile strategy. SoftBank, for instance, also owns about 83 percent of the American wireless operator Sprint.
Hermann Hauser, one of ARM's founders, said, "ARM is the proudest achievement of my life. The proposed sale to SoftBank is a sad day for me and for technology in Britain." BBC's Rory Cellan-Jones asked, "Question -- if ARM goes, what's left as a worldbeating UK-owned tech player?"
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SoftBank To Buy British Chip Designer ARM For $32 Billion More

SoftBank To Buy British Chip Designer ARM For $32 Billion

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  • Who? (Score:1, Informative)

    by Anonymous Coward

    Company I've never heard of buys most important processor company in the world. Wow.

    First, btw.

    • Re:Who? (Score:5, Funny)

      by Big Hairy Ian ( 1155547 ) on Monday July 18, 2016 @09:08AM (#52533221)
      So long Acorn and thanks for all the chips

    • Re: (Score:3, Informative)

      by Richard_at_work ( 517087 )

      ARM Holdings doesnt make processors, they license designs - other people make the processors and improve the designs.

      • Re: (Score:1)

        by Anonymous Coward

        Which doesn't make them any less the most important processor company in the world.

    • Re:Who? (Score:4, Interesting)

      by RogueyWon ( 735973 ) on Monday July 18, 2016 @09:27AM (#52533365) Journal

      Could be worse, they could have been bought out by a Chinese chicken-supplier [theguardian.com].

      Softbank may not be well known to the Western public, but it is at least an institution with a genuine track-record and a long-standing interest in the tech sector. Some of these Chinese acquisitions recently feel like attempts to manipulate China's tax or criminal codes and I worry for the future of the companies which have been acquired.

      • Could be worse, they could have been bought out by a Chinese chicken-supplier [theguardian.com].

        Fun Fact: WiPro, the famous Indian software outsourcer, gets its name from its origins: The West India Produce Company.

        • WiPro, the famous Indian software outsourcer, gets its name from its origins: The West India Produce Company.

          So its non-tech origins are a bit like Southern Pacific Rail Internet Network (Sprint) then?

          • I think your spell-checker got you. It was Southern Pacific Rail Internal Network Telecommunications. I'm fairly sure that they were running as a long-distance carrier before the Internet became a big thing, and even today they're known as a phone service, not as an Internet service (they left that part to Clear, mostly).

            WiPro still has its before-tech name, though. Sprint started out as the Brown Telephone company, and telephony is still a core business for them.

    • Re: (Score:3)

      by Nemyst ( 1383049 )
      SoftBank are the owners of Sprint and Supercell (developers of Clash of Clans, an absurdly successful mobile game), among other things. They're a very big Japanese corporation with tentacles in various areas, primarily telecommunications.

    • I was thinking about the same thing. Also with the valuation of 32 Billion, not chump change for any type of company. Apparently they own 83% of sprint (and who knows what else), so who knows what companies own what now a days...

      Though a quick wikipedia shows they are basically a cell phone provider in Japan who brought Apple there, so go figure they have lots of cash. With revenue of almost a trillion US dollars (9.15 Trillion Yen)...

      Kinda make you wonder why Apple didn't do this first really.

      • 9.15 trillion yen is only 86.3 billion USD

      • Kinda make you wonder why Apple didn't do this first really.

        Because if Apple bought ARM, then everyone else would start looking very closely at other CPU vendors. A lot of the value of ARM comes from their size: they're not big enough to be a threat to any of their partners, but they're big enough that they can act as independent mediators between their partners. The ARM ecosystem is valuable because a lot of people contribute to it but no one really controls it (ARM Holdings controls the ISA).

        If Apple bought them, then they'd suddenly stop being independent. At

        • A lot of the value of ARM comes from their size: they're not big enough to be a threat to any of their partners, but they're big enough that they can act as independent mediators between their partners. The ARM ecosystem is valuable because a lot of people contribute to it but no one really controls it (ARM Holdings controls the ISA).

          I would have to disagree. ARM's value is not their size as ARM does not actually manufacture any chips themselves. Their licensing and flexibility allows their customers wide latitude and array of designs that can be adapted for different purposes from smart phones to embedded devices like routers. Their customers could use Atom instead of ARM but Atom has less flexibility.

      • It's funny. Apple had a hand in ARM's founding. They were collaborating on RISC chips with Acorn, and that was spun-off into ARM. Apple owned a decent chunk of it for a while, but I don't know when they sold that share off.

    • Softbank (Score:5, Informative)

      by sjbe ( 173966 ) on Monday July 18, 2016 @10:50AM (#52534005)

      Company I've never heard of buys most important processor company in the world. Wow.

      Softbank is one of the 100 largest companies in the world. You not knowing them speaks more to your ignorance of Japan than anything else. They've been a big player in the tech world for decades.

      And Intel might disagree about who is the most important processor company in the world though ARM certainly has an argument for the title. ARM is king of the hill in mobile devices but changes are you typed your posting on a device with an Intel microprocessor. Which is more important? Guess that depends on your point of view.

      • Re: (Score:2)

        by Aereus ( 1042228 )

        Speaking to cell companies in Japan though, it was my understanding they were 2nd or maybe even only 3rd in subscriber base behind NTT Docomo and au. Although that was several years ago, so maybe things have changed.

        An interesting thing to note is, most people living abroad in Japan get a phone through Softbank, because the rules through the other providers are a lot more strict. Also heard some say that was because Softbank was started by a "foreigner" as well, but dunno for sure.

    • Company I've never heard of...

      Says more about you than Softbank.

      • Re: (Score:2)

        by epine ( 68316 )

        Says more about you than Softbank.

        ChemChina to buy Syngenta in $43 billion deal [marketwatch.com], from February 2016.

        Haven't heard of ChemChina?

        Says more about you than ChemChina.

        Haven't heard of Syngenta?

        Says more about you than Syngenta.

        Bet you have heard of Monsanto, which tried to buy Syngenta twice in 2015.

        Says more about your paranoid, eco-aunt than it says about you.

  • Result of brexit? (Score:5, Interesting)

    by NotInHere ( 3654617 ) on Monday July 18, 2016 @09:03AM (#52533187)

    Did they use the cheap pound to shop a british company?

    • Re:Result of brexit? (Score:5, Informative)

      by Anonymous Coward on Monday July 18, 2016 @09:11AM (#52533241)

      No, TFA says that because most of ARM's revenue is in US$, its stock went up after the vote and it got more expensive for Softbank.

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        Expect more of this now though. When the Tories talk about "investment in the UK", they mean sale of assets and companies overseas.

        ARM is probably the last major tech company we have... I can't really think of any British ones left.

        • Redgate.

        • Re: (Score:3)

          by TheSync ( 5291 )

          ARM is probably the last major tech company we have... I can't really think of any British ones left.

          BAE Systems has 107,000 employees, and Rolls-Royce Holdings has 55,500 employees. Not fully tech but highly tech oriented.

          Sky employs 22,800 folks, and keep in mind it is not just a satellite TV platform but also an ISP and OTT provider.

    • Re:Result of brexit? (Score:5, Interesting)

      by JDeane ( 1402533 ) on Monday July 18, 2016 @09:14AM (#52533259) Journal

      Maybe, but more importantly in my opinion what they plan to do with this, if they handle it correctly it's a great investment ARM CPU's are in a LOT of devices and if they can keep innovating they will be in many more and upgrades. If they just sit on it trying to collect money, Intel will eventually figure out how to make it's portable CPU's even better and eventually take the market. (Not that Intel's SoC's are bad now)

      Either way the next few years should prove interesting and we can use hindsight to see what they had in mind.

      • Well, you're getting some hate but this article from the BBC seems to agree with you.

        http://www.bbc.com/news/busine... [bbc.com]

        "That allure has been boosted by the fall in the value of the pound since Brexit - making UK targets cheaper and many industry watchers are predicting a new wave of foreign takeovers."

        • Re: (Score:2)

          by JDeane ( 1402533 )

          Thank you for that article, the plans to double the workforce is a good thing in my opinion. That should enable them to get fresh designs out faster.

      • ARM and Intel do not compete directly. At least not financially.

        Intel's competitors (for example, in the mobile or embedded businesses) are the likes of Qualcomm, Broadcom, ST and NXP.

        Intel sells discrete CPUs, while everyone else licenses a CPU core from ARM, adds in their own stuff, and then sells that. As long as someone needs to add some extra stuff in there, ARM is still the industry's preference.

        Things may get interesting with the recent acquisition of Altera (by Intel), but there is still a big gap b

        • ARM and Intel do not compete directly. At least not financially.

          In what way do they not compete financially? Each part sold by an ARM licensee is royalty income for ARM and a lost sales prospect for Intel. And ARM clearly competes directly with Intel in engineering.

          • Each part sold by an ARM licensee is royalty income for ARM and a lost sales prospect for Intel

            Except for the 99% of ARM sales that are in markets where Intel doesn't sell a competing product. And, on the flip side, a lot of Intel chips contain ARM cores, so when Intel sells a chip ARM gets some money.

            • Each part sold by an ARM licensee is royalty income for ARM and a lost sales prospect for Intel

              Except for the 99% of ARM sales that are in markets where Intel doesn't sell a competing product.

              Intel doesn't sell a competitive product, you mean. Intel certainly tried to break into the mobile market with Atom but was largely defeated by ARM. Looks like competing from where I sit.

              • Intel certainly tried to break into the mobile market with Atom but was largely defeated by ARM. Looks like competing from where I sit.

                ARM sells chips now does it? Wow, that's news.

              • Intel doesn't sell SoCs that anyone else puts accelerators on. They tried, but no one wanted to join in. Intel doesn't sell anything comparable to an M or R-profile ARM core, which is well over half of all ARM cores sold. Actually, that's not true - they sell a load of M-profile ARM cores, but only inside other products.

                • In your wildest imagining, do you honestly think that Intel does not view ARM Holdings as a competitor?

                  • In my working closely with ARM, I honestly think that ARM Holdings does not view Intel as a competitor in most of their markets (though they were very happy when Intel's CEO announced that they were a serious competitor, as it made people start to take them seriously in the server space).

                    • In my working closely with ARM, I honestly think that ARM Holdings does not view Intel as a competitor in most of their markets...

                      If that is true then they are naive, and it is a good thing for all of us that they will now be managed by an organization with more business sense.

        • ARM and Intel do not compete directly.

          Intel very much has been trying to get into the phone market, where it does compete with ARM directly. If ARM slips up, then Intel will overtake them.

          • They have been trying, sure, but aren't they not in the same league at all regarding CPU power/watt?

      • Re: (Score:3)

        by Kohath ( 38547 )

        Intel has been trying this for many years. They never succeed because Intel is trying to make chips so Intel can sell chips for phones and tablets. Intel is Intel-focused. If they focused on making chips to solve problems for customers, they might be more successful.

        Microsoft has the same problem. Windows 8 and Xbox One were very obviously Microsoft-focused products -- customers didn't want tiles or Kinect or HDMI input.

        Memo to Intel and Microsoft: don't make stuff you want to sell, make stuff people wa

        • customers didn't want tiles or Kinect or HDMI input.

          I don't have an Xbox, but I thought the HDMI input was clever -- allows passthrough rather than switching inputs on the TV/receiver.

          • Except that with modern TVs you would almost always want different display settings and profiles for watching movie content vs game content. Having it combined into a single input to the TV makes it impossible to tweak the TV for best picture modes for both. Most TVs have the best picture quality with more complicated calibration settings and PQ algorithms, all of which add enough video lag to be detrimental to playing a video game.

            I would have found the second HDMI port to be much more useful as a second o

      • Re: (Score:2, Insightful)

        by Anonymous Coward

        Arm wins in the mobile space not because of technology but because of business model.

        With ARM you can get ready made off the shelf chips or semi-customized chips base off off the shelf models. You can lisence processor blocks from ARM and other 3rd party vendors and have your own custom chip fabricated or you can license the low level tech and make your own entirely from scratch - You can then fabricate it yourself or have one or multiple third parties fabricate it.(Like apple does) - You can get arm chips

      • If they just sit on it trying to collect money, Intel will eventually figure out how to make it's portable CPU's even better and eventually take the market. (Not that Intel's SoC's are bad now)

        Intel has tried to take the market from ARM. Their problem is their offerings are much less varied than ARM. Intel's low power SoCs were primarily designed for computers and not smartphones and embedded devices. As such they may require an order of magnitude more power. For a netbook using 2W instead of 0.2 W isn't as big difference as it matters for portables electronic devices.

      • Re: (Score:2)

        by AmiMoJo ( 196126 )

        Softbank invests a lot in cell network tech. Sensor networks are a big growth area now and efforts are being made to add things like a low power, low speed mode to 4G. I imagine they are planning to combine that with low power ARM CPUs.

        At the moment many cellular modems run Java on custom SoCs, many of them running Intel cores. They are not very efficient really. There is a big opportunity here and ARM have good tech.

    • Yes, because the negotiation and due dilligence for 32 billion dollar deals happen in a few weeks. +4 Insightful what kind of crap is that?!?

    • Re:Result of brexit? (Score:4, Interesting)

      by Feral Nerd ( 3929873 ) on Monday July 18, 2016 @09:35AM (#52533445)

      Did they use the cheap pound to shop a british company?

      Just days ago May made a stirring speech where she said No. 10 should be anle to step in if foreigners tried to buy companies important to British communities and workers. Now, apparently, No. 10 approved the sale to demonstrate conclusively that: "...the UK can make a success of leaving the EU". If making a success of Brexit means selling the UK high tech sector off to Asia in bits and pieces we are all going to have to re-examine our definition of 'success'.

      • Re: (Score:2)

        by e r ( 2847683 )

        If making a success of Brexit means selling the UK high tech sector off to Asia in bits and pieces we are all going to have to re-examine our definition of 'success'.

        It's not up to the whole UK whether or not to sell ARM to Asia so there's no need to re-examine the definition of "success". But if you would prefer that corporations not sell themselves to foreign companies then I suggest that the UK reduce taxes on those corporations and focus their educational system on STEM-- both of which are strategies that the UK is now free to pursue thanks to its independence from the EU.

        • Re: (Score:2)

          by dave420 ( 699308 )

          Both strategies are 100% available to the UK within the EU... which it still is, until invoking article 50 and concluding its subsequent talks.

        • If making a success of Brexit means selling the UK high tech sector off to Asia in bits and pieces we are all going to have to re-examine our definition of 'success'.

          It's not up to the whole UK whether or not to sell ARM to Asia so there's no need to re-examine the definition of "success". But if you would prefer that corporations not sell themselves to foreign companies then I suggest that the UK reduce taxes on those corporations and focus their educational system on STEM-- both of which are strategies that the UK is now free to pursue thanks to its independence from the EU.

          UK companies can 'sell themselves' to any foreign corporation they want. I just find it amusing how May and the Conservative party went from being willing to veto the sale of companies important to British communities and workers to telling us that the way to a succesful Brexit is to flog the UK high tech industry (i.e. Companies important to British communities and workers) off to the highest bidder.

  • what about Intel and M$ (Score:3)

    by known_coward_69 ( 4151743 ) on Monday July 18, 2016 @09:13AM (#52533247)
    any chance of $100 CPU's and 20GB OS images making it in the IoT world?
  • This is a purchase!
    And it means the United Kingdom has lost another piece!

  • Who wants to buy Acorn RISC Machines? (Score:3)

    by The Evil Atheist ( 2484676 ) on Monday July 18, 2016 @09:29AM (#52533381)
    It's a little bit RISCy...

  • Brainless politicians (Score:3)

    by Wowsers ( 1151731 ) on Monday July 18, 2016 @10:27AM (#52533845) Journal
    As I type, the new British Prime Minister has applauded the deal of ARM being bought by foreigners. She doesn't have a maths degree, so it must be really difficult for her to understand all profits now will no longer boost UK GDP, but instead boost Japan's GDP. In UK, the man who setup ARM, some of the press / political commentators and economists attacking the deal, but the politicians know best. At least the bosses of ARM get very rich from the deal.

    • The Tories are more than happy to sell out everything in the UK to foreign businesses and countries. They're little more than 'lucrative business opportunity arrangers'. (To be fair this applied the the Blairite neoliberals as well).

      They portray themselves to the general public as the most patriotic, but they're really only loyal to the rich and the corporations that have the cash to give them nice consultancy fees and board memberships. Even our public services are owned and exploited by foreign corportion

    • Re: (Score:3)

      by TheSync ( 5291 )

      She doesn't have a maths degree, so it must be really difficult for her to understand all profits now will no longer boost UK GDP, but instead boost Japan's GDP

      I don't think you have an economics degree.

      If a multinational produces income in the UK, it is counted in UK GDP statistics regardless of country of ownership. If profits from that production is exported back to another country, those profits are subtracted from GNP, not GDP.

      I don't know where ARM licenses are billed to, but they have operations all

  • This makes no sense for SoftBank.

    They are paying a lot of money ($32 billion) for gross income of around $1.2billion, and profits of about 1/2 of that. Based on that, it will take 30-40 years for the investment to pay SoftBank off, based on ARMs revenue alone.

    Something doesn't add up. On one hand, they're saying that they don't plan to change their business model, or even how their R&D is done in the next years, but on the other hand - they will need to come up with something really amazing if they want

    • Re: (Score:2)

      by JDeane ( 1402533 )

      They do plan on doubling the workforce so they have something in mind for sure.

    • Re: (Score:3)

      by gtall ( 79522 )

      They are hoping to hit another homerun like they did with Ali Baba in China. Softbank figures they will own the IoT world. I expect what will happen is they will get greedy, hike licensing fees, treat the intellectual capital as labor that can be done anywhere and destroy their investment. Their noise about doubling the British workforce is just that, noise. They make that noise to get idiot Brit lawmakers thinking they should not throw up roadblocks to selling out one of Britain's best tech companies. I am

    • Re: (Score:2)

      by tomhath ( 637240 )

      Based on that, it will take 30-40 years for the investment to pay

      Read up on something called time value of money [wikipedia.org]. They are foregoing all the income they could have earned by investing the $32B somewhere else. Based on that, the investment will never pay off unless they can somehow make it a lot more profitable..

  • Meanwhile in ARM's Cambridge HQ (Score:5, Funny)

    by TechyImmigrant ( 175943 ) on Monday July 18, 2016 @10:59AM (#52534053) Homepage Journal

    The Softbank CEO walk in and asks "So where are your factories?"

    • Why not try an all meat diet? Smarter people than you do: http://www.jbc.org/content/87/... [jbc.org]

      That's an old study, and the evidence from the China study directly contradicts it....

      • Why not try an all meat diet? Smarter people than you do: http://www.jbc.org/content/87/... [jbc.org]

        That's an old study, and the evidence from the China study directly contradicts it....

        The conclusions drawn from the China Study data were in fact contradicted by the data. E.G. The highest univariate association was between wheat and cancer. But the author ignored that. The author chained together confounded univariate associations in a statistically incorrect way. Try looking here [rawfoodsos.com] for an analysis by someone who actually understands statistics.

        • The highest univariate association was between wheat and cancer. But the author ignored that.

          ok, I'll look at it again.

    • Re:Meanwhile in ARM's Cambridge HQ (Score:5, Insightful)

      by Junta ( 36770 ) on Monday July 18, 2016 @01:32PM (#52535415)

      The sad things is that businesses by and large *hate* any hardware portion of a business. So they're perfectly happy to have a pure IP company that licenses out to companies that in turn are generally *also* fabless. The more they 'saddle' some other sap with the capital intensive business of building and moving real physical goods, the happier they are.

  • What's left (Score:3)

    by ItsJustAPseudonym ( 1259172 ) on Monday July 18, 2016 @02:20PM (#52535865)

    ...if ARM goes, what's left as a worldbeating UK-owned tech player?

    At least you've got TopGear.
    Um, nevermind.

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