Japan’s SoftBank to sell chip designer Arm to Nvidia for US$40 billion, reshaping semiconductor landscape
- Nvidia began as a graphics chip designer and has expanded into products for areas including artificial intelligence and data centers.
SoftBank Group Corp said on Monday it has agreed to sell chip designer Arm to Nvidia Corp for as much as US$40 billion in a deal set to reshape the semiconductor landscape.
Nvidia will pay SoftBank US$21.5 billion in shares and US$12 billion in cash, including US$2 billion on signing. The deal will see SoftBank and the US$100 billion Vision Fund, which has a 25 per cent stake in Arm, take a stake in Nvidia of between 6.7 and 8.1 per cent.
SoftBank could also be paid an additional US$5 billion in cash or shares depending on the chip designer’s business performance, with Arm employees to be paid US$1.5 billion in Nvidia shares.
The sale marks an early exit for SoftBank, four years after the US$32 billion acquisition of the British chip technology firm. Chief Executive Masayoshi Son has lionised the potential of Arm but is slashing his stakes in major assets to raise cash.
SoftBank executives, frustrated at the group’s share performance, have held early stage talks about taking the Japanese technology group private, a source told Reuters. Those talks could gain momentum following the Arm sale.
The deal, which is subject to regulatory approvals including in Britain, the United States and China, will alter the semiconductor landscape by putting a long-neutral technology vendor to Apple Inc and others under the control of a single player.