Deal’s off for chip designer

Japan’s SoftBank shifts gear, plans for Arm IPO in ’23

TOKYO — SoftBank’s planned sale of the British semiconductor and software design company Arm to U.S. chip maker Nvidia has fallen through, but the Japanese technology investor immediately turned bullish on taking it public.

SoftBank Group Corp. said Tuesday it plans an initial public offering of Arm after the intended sale to Nvidia failed because of regulatory problems. It said the public offering would come sometime in the fiscal year ending in March 2023.

Chief Executive Officer Masayoshi Son acknowledged he was disappointed but wasted no time in shifting to an aggressive sales pitch for Arm in its preparing to go public in the U.S., likely on the Nasdaq exchange.

“Arm is back. Rather just being back, it’s really going to grow explosively,” Son told reporters.

He said “a golden time” was coming because of Arm’s “architecture,” or technology for semiconductors, already widely used in cellphones and adapted by net giants like Amazon. Son said even bigger growth will come as the world shifts to electric vehicles because Arm products are energy efficient.

Earlier faltering results at Arm were merely because of a hefty investment in hiring engineers needed to keep such innovations going, Son said.

Son said he was tapping new leadership to give Arm a fresh start, with Rene Haas, a semiconductor industry veteran, as chief executive, replacing Simon Segars.

“With the uncertainty of the past several months behind us, we are emboldened by a renewed energy to move into a growth strategy and change lives around the world again,” Haas said.

Arm, which SoftBank acquired in 2016, is a leader in artificial intelligence, the “internet of things”, the cloud, the metaverse and autonomous driving, with sales and profit growing in recent years. Its semiconductor design is widely licensed and used in virtually all smart-phones, the majority of tablets and digital TVs.

The company’s business centers on designing chips and licensing the intellectual property to customers, rather than chip manufacturing, for which it relies on partners.

Nvidia also confirmed the merger was no longer on, although it still had its 20-year licensing agreement with Arm.

In December, the Federal Trade Commission sued to block Nvidia’s $40 billion acquisition of Arm, saying the deal would give one of the largest chip companies control over the computing technology and designs that rival firms rely on to develop their own competing chips.

The FTC said the combined firm could stifle innovative next-generation technologies, including those used to run data centers and driver-assistance systems in cars.

Information for this article was contributed by Kelvin Chan of The Associated Press.


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