If proof was needed that the electronic chip market is not an industry like any other, but an issue of sovereignty, the collapse of the acquisition of ARM Holdings by Nvidia came to provide it. After almost eighteen months of behind-the-scenes negotiations, the American giant announced on Tuesday February 8 that it would give up its mega-purchase for 66 billion dollars (58 billion euros) of the British technological nugget.
He faced a wall of regulatory opposition, coming from all the major economic powers: American, European, British, Chinese, Korean and Japanese regulators had all raised objections. In September 2020, the announcement of the acquisition caused an earthquake in the microchip market, where a few but very powerful players are vying for global dominance.
On one side was Nvidia, a Californian giant, leader in particular in the market for graphics chips, used among other things in video games, but also a colossus in artificial intelligence, autonomous vehicles and computer networks. On the other, a funny British jewel, based in Cambridge, which does not manufacture anything, but carries out the design of chips for the whole world of microprocessors.
“Unique place in the supply chain”
All the majors in the sector buy this technology, using its licenses: Intel, AMD, Qualcomm… Hermann Hauser, one of the founders of ARM, who has no further ties with the company, describes it as “the Switzerland of microprocessors” : a neutral place, selling its cutting-edge design to all players in the sector. As a result, ARM technology is one of the few in Europe to still be dominant.
It is used in 95% of mobile phones in the world, but also in the Internet of Things, data centers… “We are also becoming the standard in cars, some of which have ten or twenty chips [de leur technologie]others even thirty or forty »adds Rene Haas, the new CEO of ARM, who took office on Tuesday after the failure of the acquisition.
The merger of these two behemoths – Nvidia weighs 620 billion dollars on the stock market, ARM is valued around ten times less – quickly worried politicians on all sides. In the UK, authorities have opened an investigation into the country’s national security risks. “ARM has a unique place in the technology supply chain, and we need to ensure that all implications of this transaction are carefully considered”said Nadine Dorries, the Minister of Technology, launching the investigation, in November 2021.
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