Jen-Hsun Huang, President and CEO of Nvidia Corp., speaks during the company’s event at Mobile World Congress Americas in Los Angeles on October 21, 2019.
Patrick T. Fallon | Bloomberg | fake images
US chip giant Broadcom has come out in support of Nvidia’s $ 40 billion takeover of British chip designer Arm, after other companies raised concerns about the deal.
The deal, which was announced last September, is under investigation by antitrust regulators in the US, Europe, China and the UK. Rival Qualcomm has said that Nvidia could limit the supply of Arm’s technology to its competitors or raise prices. Google and Microsoft have raised the same concerns with regulators, according to Bloomberg.
But Hock Tan, Broadcom president and CEO, said in a statement shared with CNBC that his company backs the deal after receiving the necessary guarantees.
“Arm is a key partner for Broadcom, and access to their technology is important to our current and future success,” said Tan.
“Broadcom supports Nvidia’s proposed Arm acquisition because Nvidia has assured the industry that it will increase overall investment in Arm’s technology and that it will continue to make that technology available to the industry in a fair, reasonable and nondiscriminatory manner.”
Elsewhere, MediaTek and Marvell have also voiced their support, according to a report in The Sunday Times newspaper over the weekend.
Rick Tsai, director of MediaTek Taiwan, which is the world’s largest mobile chip developer, said the semiconductor industry “will benefit from the combination of Nvidia and Arm,” according to the report.
“We believe that the merger will allow MediaTek and other industry players to bring more competitive and comprehensive products to market,” said Tsai.
Marvell CEO Matt Murphy told The Sunday Times that he has seen “no unwillingness on the part of Nvidia to address” the concerns raised by Qualcomm and others.
MediaTek and Marvell did not immediately respond to a request for comment from CNBC.
In a rare joint interview aired on June 17, Nvidia CEO Jensen Huang and Arm CEO Simon Segars attempted to explain why the deal should be allowed to go through. They tried to address concerns about Arm’s loss of independence, as well as issues related to export control and digital sovereignty.
Segars said Arm is currently struggling to meet demand as it has limited resources to leverage. “Right now, we are looking at everything we can do in one day,” he said. “We have much more to do than people to do it. That has always been the case, but right now, it’s more than ever. “
“The range of products that our licensees want to build is growing and growing,” added Segars. “What they are asking of us is increasing due to increasing complexity. There is no way we can do it on our own. “
Huang said it is important to note that “independence does not equal strength.”
Geopolitical implications?
Broadcom, MediaTek and Marvell are among the first chip firms to support the deal, which comes amid a significant global chip shortage that could last until 2023.
Graphcore CEO Nigel Toon told CNBC in December that his company views the deal as anti-competitive. “You run the risk of shutting down or limiting other companies’ access to cutting-edge CPU processor designs that are so important in the world of technology, from data centers to mobile devices, automobiles, and embedded devices of all kinds.” He said.
Local chipmakers in China, including Huawei, have urged Beijing to try to block the deal out of fear that they may be at a disadvantage if Arm ends up in the hands of a US company.
Arm is currently owned by SoftBank after the Japanese tech giant paid £ 24bn ($ 33bn) for the company in 2016.
