LONDON – Britain yesterday ordered an in-depth probe into US group Nvidia’s proposed US$40 billion (RM166.64 billion) takeover of UK chip designer Arm, citing competition and security concerns.
Digital Secretary Nadine Dorries has asked the Competition and Markets Authority (CMA) regulator for a Phase 2 probe into the acquisition, the government said in a statement.
The news is the latest setback for the blockbuster deal, which also faces a competition probe by the European Commission – and comes amid a chronic global shortage of semiconductors.
Japan’s SoftBank Group announced last year that it was selling Arm for up to US$40 billion in a deal it hoped to complete in early 2022, subject to regulatory approvals.
However, the CMA stated in initial findings earlier this year that the deal raised “serious competition concerns” because it might restrict access by Nvidia’s rivals to Arm technology.
“I have carefully considered the CMA’s Phase 1 report into Nvidia’s proposed takeover of Arm and have decided to ask them to undertake a further in-depth ’Phase 2 investigation,” Dorries said in yesterday’s statement.
“Arm has a unique place in the global technology supply chain and we must make sure the implications of this transaction are fully considered.
“The CMA will now report to me on competition and national security grounds and provide advice on the next steps.”
A Nvidia spokeperson stressed it would work alongside the CMA and the UK government to address and “resolve” their concerns.
In a separate development last month, the European Commission announced it would investigate Nvidia’s proposed Arm takeover, expressing concern that the deal could harm competition and result in higher prices.
Founded in 1990, Arm specialises in microprocessors and dominates the global smartphone market. But its chips are also found in sensors, smart devices and cloud services.
Nvidia, known for graphics cards favoured in the video game industry, saw sales soar during Covid-19 lockdowns as gaming exploded in popularity.
SoftBank had purchased Arm in 2016 for US$32 billion.
Yesterday’s news comes as a chronic shortage of computer chips hobbles auto manufacturers worldwide.
Arm’s Chief Executive Simon Segars had warned this month that the shortage will last until the end of next year.
The semiconductor industry was overwhelmed as consumers snapped up electronic devices during the pandemic.
That increased demand, along with disruptions caused by Covid-19 lockdowns, sparking widespread shortages. – AFP, November 17, 2021
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