The upcoming sale of Arm Holdings to Nvidia Corp. for $ 40 billion could have far-reaching implications for the global semiconductor industry, further elevating one of its largest flyers and making another big bet by SoftBank Group Corp.
The Japanese tech conglomerate said late Sunday that it had reached a deal to sell Arm to Nvidia for a mix of cash and stock, confirming a report from the Wall Street Journal on Saturday. Nvidia
will pay $ 21.5 billion in stock and $ 12 billion in cash. SoftBank
it can also receive up to $ 5 billion in cash or stock provided the arm meets its financial performance targets. Nvidia will also issue $ 1.5 billion in stock to Arm’s employees.
Nvidia, which makes graphics processors, and Arm, which designs microprocessors that power most of the world’s smartphones, may not be household names, but they are some of the biggest players in the chip industry. A union would instantly elevate Nvidia, whose title was one of the best performers in the market this year, into a dominant force in the smartphone market and a major technology provider for a range of other devices, from smart speakers to fitness trackers.
The deal, one of the largest semiconductor acquisitions ever, marks a win for SoftBank and its chief executive, Masayoshi Son, who bought Arm four years ago for $ 32 billion and had struggled to start growing the business.
For Nvidia CEO Jensen Huang, it’s the biggest gamble since he helped co-found the chip maker in 1993. Nvidia is a fast-growing industry player best known for making the graphics chips that power graphics. video games like on the hugely popular Nintendo Switch. Chips were in high demand during the pandemic as the blocks keep people at home.
An extended version of this report is displayed on WSJ.com.
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