Samsung looking to buy a 3 to 5% slice of Arm

[soldier_ph]

Summary

A top Industry Official told Korea Times on Monday, August 3rd, that Samsung is joining the race to buy at least a slice Arm Holdings, the British Chip Designer, from Japan's SoftBank, if not like an all out acquisition bid like the one from Nvidia. The Korea Times reported that the Korean Chip maker, which is also an Arm licensee like Nvidia, is eyeing a tiny 3 to 5 percent take in Arm Holdings. A top industry official on the condition of anonymity told the Korea Times that Arm is likely to be acquired by a consortium of multiple companies from the semiconductor industry, given the complex shareholding pattern of Arm Holdings. It is hence why that Nvidia isn't Samsung's direct rival but rather an amorphous consortium that includes it. At the very least Samsung's buying of stakes in Arm Holdings can be a factor for the Chip Designer to increase in value making it that much more difficult for Nvidia.

 

Quotes

Quote

-Quote from the Korea Times Article-

 

Samsung Electronics is set to join the acquisition race for the British semiconductor company Arm, which has been put up for sale by its current owner SoftBank, but the Korean tech giant will try to participate in the bid in the form of equity investment, obtaining a small stake in the chip-designing firm, according to a top official in the semiconductor industry here, Monday.

"Samsung Electronics is considering acquiring a small stake in Arm, which will be between 3 percent and 5 percent," said the top industry official, who requested to remain anonymous. "Arm will be acquired by a consortium led by multiple parties from the semiconductor industry given the complex nature of Arm's shareholding structure."

The official also mentioned that Samsung's move in the acquisition race will be similar to that of acquiring equities in Dutch semiconductor equipment maker ASML.

 

"As seen in Samsung's previous equity purchasing in ASML, Samsung will likely try to acquire equities in Arm. As Samsung could solidify its partnership with ASML after the equity acquisition, Samsung expects it can reduce its licensing fee expenditure by securing equity in Arm," the official added.

 

Established in 1990, the U.K.-based company Arm is a global leader in mobile chip architecture design that generates profit by licensing its intellectual property to tech giants including Samsung Electronics, Apple and Qualcomm.

Mobile application processor chips are used in most smartphones; Apple's A-series, Samsung's Exynos and Qualcomm's Snapdragon chips are based on Arm's architecture. Every chipmaker using the architecture pays a licensing fee upfront, which depends on the complexity of the design, and the companies additionally pay a royalty for each chip sold.

Its mother company SoftBank is considering either selling Arm or going through with an initial public offering for the chip-designing unit because the Japanese tech giant is strapped for cash after its $100 billion Vision Fund posted losses for two consecutive quarters.

It was rumored that Samsung or other tech giants such as Apple or Nvidia would attempt to acquire Arm as such a move could help them take the upper hand in the semiconductor market.

 

My thoughts

Well this is certainly very interesting. I think that it is more likely for a consortium consisting of Samsung and other Arm licensee's like Apple and Qualcomm to each buy multiple stakes in Arm Holdings rather than for Nvidia to acquire the whole Chip Designer at once.

 

Sources

Korea Times

 

TechPowerUp

[captain_to_fire]

Inb4 Intel joins the bid...

/jk

 

Maybe we'll now see high performance Exynos chips that can go head to head with Apple Silicon.

[MRA]

First Nvidia and now Samsung. The next thing you know, Apple will also be contesting for ARM.

[themaniac]

46 minutes ago, MRA said:

First Nvidia and now Samsung. The next thing you know, Apple will also be contesting for ARM.

That's a good thing though, the more spread the ownership the better

[HempBoosh]

1 hour ago, themaniac said:

That's a good thing though, the more spread the ownership the better

Yeah, don't want someone to have too much control of the manufacturing side of things when so many companies depend on it.

[LAwLz]

Like I said in the "Nvidia might buy ARM" thread, I think the optimal solution would be to have multiple companies all own a small part of ARM so that no single company has control. I'd be more than happy if Samsung, Nvidia and several more buys ARM together.

 

 

  

7 hours ago, captain_to_fire said:

Maybe we'll now see high performance Exynos chips that can go head to head with Apple Silicon.

Those are already on their way.

 

Samsung is working with AMD to make GPUs for Exynos, and those results seems quite promising so far.

ARM has announced a new CPU architecture that will most likely be used in the next Exynos chip, and it is estimated to be around A13 levels of performance.

[mr moose]

With so much interest in ARM it's hard to imagine ARM itself is not making money and how much trouble softbank might be in to want to sell it.

[porina]

5 hours ago, MRA said:

First Nvidia and now Samsung. The next thing you know, Apple will also be contesting for ARM.

Not sure I can find the source again, but a news source has said Apple weren't interested. Probably somewhere in the nvidia buying Arm thread if you're interested enough to look for it.

 

5 minutes ago, mr moose said:

With so much interest in ARM it's hard to imagine ARM itself is not making money and how much trouble softbank might be in to want to sell it.

Reasons can be complicated, not just "we need cash, quick". 

[LAwLz]

15 minutes ago, mr moose said:

With so much interest in ARM it's hard to imagine ARM itself is not making money and how much trouble softbank might be in to want to sell it.

Softbank overpaid like crazy when they bought ARM.

 

ARM cores are used everywhere, but ARM itself doesn't make much money from it.

If ARM tries to change licensing or raise prices then chip makers will start moving towards RISC or some other architecture.

ARM also invested a lot of money into IoT after they were bought by Softbank, and that part of the business is apparently even less profitable than the other parts.

 

Softbank bought ARM for 31 billion dollars.

In 2017 ARM's net income was something like 300 million dollars.

 

 

It will literally take Softbank over 100 years to break even on the acquisition, and my guess is that Softbank don't want to wait that long.

[JoseGuya]

8 hours ago, MRA said:

First Nvidia and now Samsung. The next thing you know, Apple will also be contesting for ARM.

Isn't Apple a founding member of ARM? Do they still have stocks?

[Doobeedoo]

Just buy all of it heh. 

[Kisai]

6 hours ago, mr moose said:

With so much interest in ARM it's hard to imagine ARM itself is not making money and how much trouble softbank might be in to want to sell it.

 

 

5 days ago:

https://asia.nikkei.com/Business/SoftBank2/SoftBank-to-maintain-stake-in-Arm-after-partial-sale

Quote

TOKYO -- SoftBank Group plans to maintain a stake in U.K. chip designer Arm, which has formed the core of its strategic investments in artificial intelligence, even if it sells a partial interest to Nvidia or through an initial public offering, Nikkei has leaned.

SoftBank was already considering an IPO of Arm in the next few years when it was approached by Nvidia last month, according to sources. A sale would not be part of SoftBank's current $41 billion asset monetization program, which it has already made progress by selling shares in U.S. carrier T-Mobile and other companies. 

A source familiar with the matter said "there is no change to the IPO plan," but that SoftBank has not ruled out a bilateral deal and is weighing both options. 

 

Intent on holding on to a partial stake, SoftBank is negotiating the terms and schemes with Nvidia, sources said. One possibility is for SoftBank to take a stake in Nvidia after it bought Arm.

 

The thing is, there's still this problem:

 

https://www.businessinsider.com/arm-conflict-china-complicates-acquisition-prospects-2020-8

 

Quote

UK-based chip designer Arm appears to no longer be in control of its joint-venture business unit, Arm China. In May, Arm fired Allen Wu, the head of Arm China, but Wu refused to acknowledge the decision and has continued overseeing operations of the business unit, according to Bloomberg.

 

 

Arm China also reportedly won't let members of the UK parent entity onto its premises. Last week, Arm China issued a statement reaffirming its commitment to "empowering the foundation of China's semiconductor industry." Meanwhile Arm has attempted to exude a calm and confident air, telling Nikkei Asian Review: "The Arm China board is working closely with government authorities to peacefully resolve the current issue and ensure Allen Wu is unable to commit further harmful or disruptive actions." 

So China is just ready to steal the IP of the company, which puts a dark cloud over the company. Like anything manufactured with Chinese ARM parts would be unlicensed, and thus pretty much everything produced with Chinese ARM IP would be illegal to import everywhere outside China.

 

Quote

SoftBank is reportedly looking to sell Arm to Nvidia, but the tensions between Arm and Arm China complicate this endeavor. Late last week, Bloomberg reported that Nvidia is now in "advanced talks" to purchase Arm from the beleaguered Japanese investment giant SoftBank. If Arm China is no longer answering to its UK parent company, however, the proprietary value of Arm's IP may depreciate considerably, since there could be two companies independently licensing Arm chip architectures.

It's not the same as say, something like rail technology where Chinese companys can be completely cut out of the bidding on a transportation project due to import regulations. Chinese chips are in a lot of chinese-market products, sometimes ending up in export markets.

 

For example:

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

Allwinner, is a Chinese company that sells ARM parts for Tablets and SmartTV's, OrangePi, NES Classic/SNES Classic. The same company violates the GPL license and continues to do so.

 

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

Rockchip, is a Chinese company that sells ARM parts for Asus Chromebook, Samsung Chromebook, OrangePi 4, RockPi 4, Huawei products.

 

So let's say the worst happens, nVidia buys ARM 100%, nVidia is unable to get ARM China to stand down, so nVidia sues it in every country to block the import of any unlicensed ARM chips, nVidia doubles down on this by requiring any nVidia produced ARM design use the nVidia Tegra GPU, dropping Mali and forbidding any chip to be produced with Mali by revoking the licenses for it. So any SoC that doesn't have an nVidia GPU logic part becomes an illegal product, and this pushes Qualcomm and Samsung into using it and dropping their own GPU parts. PowerVR and Adreno go extinct on the ARM platform.

 

There is precedent for that, Qualcomm did that with their modems requiring the use of their CPU.

https://www.cnet.com/news/qualcomm-ftc-lawsuit-everything-you-need-to-know-faq/

 

Spoiler, Qualcomm lost. But tying the ARM CPU core up in a way it can't be unmarried from the GPU is an entirely possible thing.

[RejZoR]

15 hours ago, captain_to_fire said:

Inb4 Intel joins the bid...

/jk

 

Maybe we'll now see high performance Exynos chips that can go head to head with Apple Silicon.

The thing is, it's not ARM that dictates this. ARM is a fabless chip designer. Basically they design the foundations and then it's up to actual chip makers to make them. Exynos is Samsung's chip design based on ARM foundations. Qualcomm, the makers of Snapdragon are the other one. There is also Apple and Mediatek to name few big who use ARM architecture. And I don't think this will change anything...

[mr moose]

5 hours ago, Kisai said:

 

 

5 days ago:

https://asia.nikkei.com/Business/SoftBank2/SoftBank-to-maintain-stake-in-Arm-after-partial-sale

 

The thing is, there's still this problem:

 

https://www.businessinsider.com/arm-conflict-china-complicates-acquisition-prospects-2020-8

 

So China is just ready to steal the IP of the company, which puts a dark cloud over the company. Like anything manufactured with Chinese ARM parts would be unlicensed, and thus pretty much everything produced with Chinese ARM IP would be illegal to import everywhere outside China.

 

It's not the same as say, something like rail technology where Chinese companys can be completely cut out of the bidding on a transportation project due to import regulations. Chinese chips are in a lot of chinese-market products, sometimes ending up in export markets.

 

For example:

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

Allwinner, is a Chinese company that sells ARM parts for Tablets and SmartTV's, OrangePi, NES Classic/SNES Classic. The same company violates the GPL license and continues to do so.

 

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

Rockchip, is a Chinese company that sells ARM parts for Asus Chromebook, Samsung Chromebook, OrangePi 4, RockPi 4, Huawei products.

 

So let's say the worst happens, nVidia buys ARM 100%, nVidia is unable to get ARM China to stand down, so nVidia sues it in every country to block the import of any unlicensed ARM chips, nVidia doubles down on this by requiring any nVidia produced ARM design use the nVidia Tegra GPU, dropping Mali and forbidding any chip to be produced with Mali by revoking the licenses for it. So any SoC that doesn't have an nVidia GPU logic part becomes an illegal product, and this pushes Qualcomm and Samsung into using it and dropping their own GPU parts. PowerVR and Adreno go extinct on the ARM platform.

 

There is precedent for that, Qualcomm did that with their modems requiring the use of their CPU.

https://www.cnet.com/news/qualcomm-ftc-lawsuit-everything-you-need-to-know-faq/

 

Spoiler, Qualcomm lost. But tying the ARM CPU core up in a way it can't be unmarried from the GPU is an entirely possible thing.

I know all that, my comments were upon reflection of earlier comments regarding arm not making much money.   Also business of this nature is very complex, The problems with arm in china won't be resolved in blocking product,  if nvidia shut anything down it will be part of their original plan.

[Guest]

Thats going to cost them an ARM and a leg

[mr moose]

1 hour ago, RorzNZ said:

Thats going to cost them an ARM and a leg

That joke can't leave you out on a limb.

[Kisai]

10 hours ago, RejZoR said:

The thing is, it's not ARM that dictates this. ARM is a fabless chip designer. Basically they design the foundations and then it's up to actual chip makers to make them. Exynos is Samsung's chip design based on ARM foundations. Qualcomm, the makers of Snapdragon are the other one. There is also Apple and Mediatek to name few big who use ARM architecture. And I don't think this will change anything...

It's still a license thing.

 

So let's say theoretically, nVidia buys ARM, nvARM decides to 

a) Take everything private and not license anything

- Ultimately screwing over all the competing SoC's.

- Anything that is still in the channel at the time can probably keep being sold due to grandfathered agreements, but locked out of all new nvARM designs

b) Sue all unlicensed ARM designs, eg Intel, Apple, AMD, Qualcomm, Samsung, MediaTek, and all the smaller companies that use it. Let the chips fall where they may.

- Intel doesn't need ARM since it has it's own CPU IP it could always marry to it's FPGA SoC's where ARM is presently used, or just keep using the ARM cores it has since those SoC's typically aren't used the same way as CPU+GPU designs. I really doubt nVidia would try to lock Intel out since it can turn out very poorly for nVidia, since there is precendent for that.

- AMD doesn't need ARM since it has it's own CPU IP as well. Might not bode well for the Opteron A though.

- Qualcomm needs ARM for their CPU's. So they are extremely screwed.

- Samsung needs ARM for their CPU's and Mali for their GPU's, otherwise they are extremely screwed.

- Apple doesn't really need ARM for their CPU's, and has never used ARM's GPU parts (they've always used PowerVR's other than when they licensed a different IP for it, which at best is described as an Apple-designed GPU part using licensed IP)

- Pretty much all Chinese SoC vendors using ARM as the CPU are using Mali as the GPU and thus need it, and are utterly screwed, which means kiss good buy all your cheap Chinese-made IoT hardware.

c) nVidia doubles down on this ARM China theft, and makes sure that only ARM parts using their Tegra GPU IP are authorized ARM parts, and any other stand-alone SoC without it is an unauthorized design.

 

Like my opinion is that nVidia simply can't rock the boat too hard because it's not like there is only one CPU IP vendor out there, just that if nVidia ends up being the sole owner of ARM that can cause a lot of anti-competitive activities to fall out, ultimately ruining the tech much in the same way Sun/Oracle ruined everything related to Java and MySQL. Companies that acquire things ultimately to crush them and move customers to their more expensive, and usually inferior products suck, and nVidia has several major precedents for doing that. 3DFX (to be fair, 3DFX had no option,) Transgaming (Cedega), Icera (shutdown in 2015 after being purchased in 2011.)

 

So, no I don't think it's in anyones best interests for nVidia to acquire ARM let alone acquire a majority share in it. The ideal situation is that nobody acquires a majority share in it, and it ends up being split between the major ARM chip licenses to lower their own license costs. That's the only net win to go.

 

[RejZoR]

There is NO way they can just stop ARM licensing. No one is going to allow that no matter what. Entire smartphone industry, tablets, routers, TV's, smart watches etc. Everything runs on ARM. Doing so would make things billion times worse than a monopoly.

[Kisai]

21 minutes ago, RejZoR said:

There is NO way they can just stop ARM licensing. No one is going to allow that no matter what. Entire smartphone industry, tablets, routers, TV's, smart watches etc. Everything runs on ARM. Doing so would make things billion times worse than a monopoly.

No company operates out of the goodness of their completely missing heart. Crappier companies like Oracle have tried, and failed. Remember Java? It was going to be the tech that runs everything on anything, and now it's basically dead tech entirely due to that. C# pretty much ate it's lunch for all the user-facing software it could have been used in.

[RejZoR]

It's not about goodness of their heart, it's about entire digital world industry depending on it. ARM unintentionally created a monopoly. But because they were licensing it to everyone, there was no issue. One buying ARM and cutting all the licensing to keep the tech for themselves, well, that would make it a monopoly, killing off entire smartphone industry. There is no way it would recover from it and those that would, there would be massive losses before they could shift to I don't know, some sort of Intel Atom or AMD's embedded SoC or the RISC V. If NVIDIA did that years ago when ARM wasn't used in 99% of mobile devices it would be like whatever. Not so much today.

 

At the very least they'd be forced to provide license for a certain period of time until companies relying on it can transition to some other solution or something. I don't know. We haven't had such situation to date afaik.

[mr moose]

1 hour ago, Kisai said:

It's still a license thing.

 

So let's say theoretically, nVidia buys ARM, nvARM decides to 

a) Take everything private and not license anything

- Ultimately screwing over all the competing SoC's.

- Anything that is still in the channel at the time can probably keep being sold due to grandfathered agreements, but locked out of all new nvARM designs

b) Sue all unlicensed ARM designs, eg Intel, Apple, AMD, Qualcomm, Samsung, MediaTek, and all the smaller companies that use it. Let the chips fall where they may.

- Intel doesn't need ARM since it has it's own CPU IP it could always marry to it's FPGA SoC's where ARM is presently used, or just keep using the ARM cores it has since those SoC's typically aren't used the same way as CPU+GPU designs. I really doubt nVidia would try to lock Intel out since it can turn out very poorly for nVidia, since there is precendent for that.

- AMD doesn't need ARM since it has it's own CPU IP as well. Might not bode well for the Opteron A though.

- Qualcomm needs ARM for their CPU's. So they are extremely screwed.

- Samsung needs ARM for their CPU's and Mali for their GPU's, otherwise they are extremely screwed.

- Apple doesn't really need ARM for their CPU's, and has never used ARM's GPU parts (they've always used PowerVR's other than when they licensed a different IP for it, which at best is described as an Apple-designed GPU part using licensed IP)

- Pretty much all Chinese SoC vendors using ARM as the CPU are using Mali as the GPU and thus need it, and are utterly screwed, which means kiss good buy all your cheap Chinese-made IoT hardware.

c) nVidia doubles down on this ARM China theft, and makes sure that only ARM parts using their Tegra GPU IP are authorized ARM parts, and any other stand-alone SoC without it is an unauthorized design.

 

Like my opinion is that nVidia simply can't rock the boat too hard because it's not like there is only one CPU IP vendor out there, just that if nVidia ends up being the sole owner of ARM that can cause a lot of anti-competitive activities to fall out, ultimately ruining the tech much in the same way Sun/Oracle ruined everything related to Java and MySQL. Companies that acquire things ultimately to crush them and move customers to their more expensive, and usually inferior products suck, and nVidia has several major precedents for doing that. 3DFX (to be fair, 3DFX had no option,) Transgaming (Cedega), Icera (shutdown in 2015 after being purchased in 2011.)

 

So, no I don't think it's in anyones best interests for nVidia to acquire ARM let alone acquire a majority share in it. The ideal situation is that nobody acquires a majority share in it, and it ends up being split between the major ARM chip licenses to lower their own license costs. That's the only net win to go.

 

What you suggest there would be a classic antitrust case. 

[LAwLz]

1 hour ago, Kisai said:

Remember Java? It was going to be the tech that runs everything on anything, and now it's basically dead tech entirely due to that.

Ehm... Where did you get the idea that Java is dead from?

According to GitHub's report, Java is the third most used language, only being beaten by JavaScript and Python.

 

Saying that Java is "dead" is simply not true. It's one of the most alive and actively used languages out there.

[Kisai]

6 hours ago, LAwLz said:

Ehm... Where did you get the idea that Java is dead from?

According to GitHub's report, Java is the third most used language, only being beaten by JavaScript and Python.

 

Saying that Java is "dead" is simply not true. It's one of the most alive and actively used languages out there.

Name one game that isn't Minecraft, or a vital application you use on a daily basis that runs on Java. If I'm being generous Open Office uses Java in some way, but doesn't actually run on Java. That's just legacy stuff that is essentially unmaintained.

 

https://blogs.oracle.com/javamagazine/the-top-25-greatest-java-apps-ever-written

 

Of the things on the list nine are developer tools for Java. That's like saying the most popular car to use the Tesla Superchargers are Teslas... they aren't used for anything else. Five are NASA tools, Four are search engine tools. The only game on the list is Minecraft, which hasn't been the Java version for three years.

 

Like I said, it's essentially dead because using it is poison. J2ME is dead, Java browser support is dead. Android's Java implementation is basically old Java6 from 2006, and nobody legitimately uses it anyway. Even some sites that list "popular java" software mistakenly include "Android Version"'s of non-Java software despite those android versions using no Java code in them.

 

Like even trying to find a list is pretty telling of how little Java is used. A lot of copycat "you can use Java for (thing)" sites popup, but no lists of software.

[Kisai]

8 hours ago, mr moose said:

What you suggest there would be a classic antitrust case. 

And yet, since when has that actually stopped any company? Qualcomm still exists, Microsoft still exists, Amazon still exists, Uber still exists, Facebook Still exists. The only company in history that has ever actually been punished for it, and things have arguably been better for it is the breakup of AT&T. Yet still many of their surviving companies have re-merged and engage in the very same activity they were once broken up for. At worst, they will get slapped with a "Stop doing that" after tying it up in court for 5 years.

[LAwLz]

41 minutes ago, Kisai said:

Name one game that isn't Minecraft, or a vital application you use on a daily basis that runs on Java. If I'm being generous Open Office uses Java in some way, but doesn't actually run on Java. That's just legacy stuff that is essentially unmaintained.

A lot of backend stuff runs on Java. 

 

If you want applications I personally use then I'd say ASDM, and elasticsearch. 

 

But that's kind of besides the point. Calling the third largest and most popular language in the world "dead" is silly. And I say it's the third most popular language because that's what the GitHub report I linked earlier says. 

Just because you personally don't use it that much doesn't mean it's dead. 

On top of it being the third most widely used language on GitHub, it is also the most sought after language in the job market.