He was saying why wouldn't a chipmaker buy them. The cost for ARM is about 1.5 years of Intel income.
SoftBank acquires ARM for $32B+
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He was saying why wouldn't a chipmaker buy them. The cost for ARM is about 1.5 years of Intel income.
TheGreyHulk
Member
Intel hoping for softbank to mess shit up and give them a second chance at mobile.
GrantDaNasty
Member
I can't check the story to see if they say how the transaction is conducted, but total assets are valued at $240 billion for Softbank, I imagine they could find a way to get $32 billion for a deal like this if need be.
Triplicates
Member
They're more of an investment company than a wireless carrier. They like to invest in tech. Softbank's initial investment in Alibaba was like 20 million dollars. Today, it's worth around 60 billion. That's their biggest ever by far, but they have all sorts of deals like that under their umbrella.
andythinkpad
Member
Well in that case, I doubt Intel can buy them without getting into monopoly trouble.
ARM's IP is worth a lot, so I wonder if Softbank buying their company is an attempt to move ARM away from their current revenue -- ie. licensing -- structure and into new business areas.
Then again, it could be as simple as Softbank thinking "we like your IP, we think it'll increase in value, we're going to buy you".
Baroquemantic
Member
Wow.
ARM is a publicly listed company. The shareholders can sell their shares. If the board receives an offer to buy all the shares, and the board thinks it is in the best interests of the shareholders, they can ask the shareholders to approve such a sale.
HideyoshiJP
Member
Bow to our fluffy overlord.
Now back to you, Inuyama-san.
I think this is a very impressive move for Softbank. Not only are they going to take advantage of the relative JPY/GBP positions due to the Brexit, but makes complete sense, considering how many mobile holdings they have.
Tallshortman
Member
They must have big plans to change ARM's business since their revenue does not match up with the purchase price.
Khalifa Jayy
Banned
Can these secondary companies not really match the tech put out by ARM? If not, why not? Some secret sauce? I'm confused as to why they exist, especially if that's their only role.
Of course it doesn't. The $32B price-tag was for the IP.
Looks like there'll be very few redundancies with this buyout then
EdwardTeach
Member
We own a lot of ARM shares and have owned them since the mid 00's so we are making a killing on this. Sad to see the company move to foreign ownership though.
ClosingADoor
Member
Chip making is a difficult thing to do. And you can't just copy them, since they hold he patents and such, so you take a license on their work.
Burgess_101
Member
I have shares in ARM, what is best next step? I am still new to this and I am not sure whether to sell or what.
if your unsure, give them to me.
Burgess_101
Member
I'm not that unsure.
Any remotly decent cpu company could probably come up with an ISA as good or better than ARM. However like x86, better is't nearly as relevant as is the amount of software that exist for it. Hence R&D from a grip of companies gets thrown into pushing it along since mobile is basically locked into them at this point.
Google or whoever could probably change to MIPS or whatever with at the worst no performance difference. But if nothing but stock Android(or IOS for argument purposes) runs well on it and everyone has to recompile all their apps none of that actually matters. ARM was cheap and a good architecture for low power at the right time so it what everyone mobile went with it.
MIPS still has to be licensed from Imagination Technologies. Other companies could probably come up with their own chips but it would not be trivial I think. There's more to chip design than just deriving an instruction set. They probably think it to be better to use their engineers elsewhere.
HoodWinked
Member
gotta spend that supercell money.
Sure ARM has a huge presence in the mobile processing market. As a company size they're more comparable to AMD than Intel. ARM annual revenue is in the hundreds of millions instead of billions like Intel.
As mentioned by other, ARM makes their money off licensing their processor design. However, I'm keen to believe SoftBank didn't simply buy ARM for $32B to earn those hundreds of millions through licensing revenue. They must've believed there are values in ARM's IP that'll have a greater return to justify the price.
It'll be interesting to see what SoftBank plans to do with ARM. If, somehow, they move away from the licensing model...how it'll impact the mobile chip market, i.e. people like Apple, Samsung, and Qualcomm that relies on the ARM design and Intel, who desperately trying to break in.
Edit:
Oh just read the TechCrunch article. Seems like SoftBank is interested in the IoT portion of ARM, so this might not have much of an affect on processor design and licensing. Still not sure what exactly they're doing with IoT that convinced them to buy ARM outright. They're selling off quite a bit of holding from other investments to finance this. Something must've compelled them to do this. Time will tell whether they've made the right move and its impact.
I'm guessing a MIPS license is pretty cheap right now but that wasn't really the point, it was just another ISA that came to mind. It isn't necessarily trivial but there also isn't really anything special from a purely technical standpoint of ARM's ISA. They were cheap and low power at the right time so the majority of the software ecosystem for mobile developed on them creating a similar lock in to x86 in the desktop arena.
On your point about the instruction set, to a point thats right but the most prominent ARM suppliers do only get an ISA from them. Apple, Qualcomm, Samsung, and Nvidia are ARM architecture licensees and do only license the ISA(snapdragon 810 withstanding) and design the actual SOC themselves.
frankie_baby
Member
So disappointing to see a world dominating british company being sold to a foreign owner
So they don't get the Verilog/VHDL cpu core design code? I did not know this. Edit: So there's apparently core licensing and architectural licensing. With companies mentioned being architectural licensees.
Backwards software compatibility and entrenched developer tools/knowledge definitely serves as a huge barrier to entry no doubt (and in part explains the continued existence of x86 despite the many complaints I hear about it). I did not mean to imply that ARM's design is somehow special.
It was listed on a US stock exchange. Are you sure that most of the shareholders were British? SoftBank seems intent on keeping the company British and seems to plan on expanding in the UK.
Jezbollah
Member
Negative.
ARM make most of their money in dollars. In fact, after Brexit, their shares went up.
nature boy
Member
32 Billion? That's a big bet, even regarding ARM and how dominant it is.
Its primary listing is on the LSE. The Japanese Yen has gone up and the UK pound has gone down. Paying in yen converted into pounds, it is a huge discount from say, 4 weeks ago.
Their shares soared.
But the shares are still denominated in GBP, hence people referring to a "sale".
Jezbollah
Member
Yep, and 4 weeks ago until now, before the takeover talk, ARM share price went up by from 1,028 to 1,189 (and that was before the takeover spike, it's now 1,693).
Cheeky banter to be acquired by ebaumsworld for 28B$.
Anyway, Sky have a statement from May, is it related to this?
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Prime Minister Theresa May says all foreign takeover bids will be assessed to determine whether they are in the national interest
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