Jen-Hsun Huang, President and Chief Executive Officer 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 | Getty Images
US chip giant Broadcom has spoken out in favor of Nvidia’s acquisition of British chip designer Arm, $ 40 billion, after other companies raised concerns about the deal.
The deal, which was announced last September, is under review by antitrust authorities in the US, Europe, China and the UK. Rival Qualcomm has said Nvidia could limit the supply of arm tech to its competitors or raise prices. Google and Microsoft have raised the same concerns with regulators, according to Bloomberg.
But Broadcom president and CEO Hock Tan said in a statement shared with CNBC that his company will support the deal after receiving the necessary assurances.
“Arm is a critical partner for Broadcom, and access to its technology is critical to our current and future success,” said Tan.
“Broadcom supports Nvidia’s proposed acquisition of Arm because Nvidia has committed to the industry that it will increase its total investment in Arm’s technology and continue to make that technology available to the industry on a fair, reasonable and non-discriminatory basis.”
Marvell CEO Matt Murphy told CNBC, “Nvidia has outlined commitments to the Arm ecosystem that address Marvell’s concerns about the proposed transaction.”
He added that Marvell sees several benefits, including “speeding up roadmaps for high-end CPU cores and enabling wider adoption of ARM-based designs in the industry.”
Rick Tsai, head of Taiwan’s MediaTek, the world’s largest mobile chip developer, said in a comment on a website hosted by Nvidia and Arm, to promote the deal, the semiconductor industry “will benefit from the combination of Nvidia and Arm. “
“We believe the merger will enable MediaTek and other industry participants to bring more competitive and comprehensive products to market,” said Tsai.
The support of the chip giants was first reported by The Sunday Times.
In a rare joint interview that aired on June 17, Nvidia CEO Jensen Huang and Arm CEO Simon Segars attempted to explain why the deal should go ahead. They tried to address concerns about Arm’s loss of independence, as well as issues of export control and digital sovereignty.
Segars said Arm is currently struggling to meet demand as the company has limited resources. “Right now we’re looking at what we can do in a day,” he said. “We just have a lot more to do than people. It has always been like that, but at the moment it is more than ever.”
“The range of products that our licensees want to develop is growing and growing,” added Segars. “What they ask of us is increasing because of the increasing complexity. We cannot do it alone.”
Huang said it is important to note that “independence does not equate with strength”.
Broadcom, MediaTek and Marvell are among the first chip companies to endorse the deal, which takes place amid a major global chip shortage that could last through 2023.
Nigel Toon, CEO of Graphcore, told CNBC in December that his company viewed the deal as anti-competitive. “There is a danger that other companies will close or restrict access to the cutting-edge CPU processor designs that are so important in the entire technology world, from data centers to mobile devices to cars and in all kinds of embedded devices,” he said.
Local chipmakers in China, including Huawei, have urged Beijing to block the deal as they fear it could be at a disadvantage if Arm gets into the hands of a US company.
Arm is currently owned by SoftBank after the Japanese tech giant paid £ 24 billion ($ 33 billion) for the company in 2016.
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