Nvidia Corp is quietly preparing to abandon its purchase of Arm Ltd from Softbank Group Corp after making little to no progress in winning approval for the US$40 billion chip deal, people familiar with the matter said.
Nvidia has told partners that it does not expect the transaction to close, said one person, who asked not to be identified because the discussions are private.
Meanwhile, Softbank is stepping up preparations for an Arm initial public offering as an alternative to the Nvidia takeover, another person said.
Photo: Reuters
The purchase — poised to become the biggest semiconductor deal in history when it was announced in September 2020 — has drawn a fierce backlash from regulators and the chip industry, including Arm’s own customers.
The US Federal Trade Commission sued to stop the transaction in December last year, saying that Nvidia would become too powerful if it gained control of Arm’s chip designs.
The acquisition also faces resistance in China, where authorities are inclined to block the takeover if it wins approvals elsewhere, one person said.
However, hey do not expect it to get that far.
Nvidia and Arm’s leadership are still pleading their case to regulators, and no final decisions have been made, the people said.
Through it all, the companies have publicly maintained their commitment to the purchase.
“We continue to hold the views expressed in detail in our latest regulatory filings — that this transaction provides an opportunity to accelerate Arm and boost competition and innovation,” Nvidia spokesman Bob Sherbin said.
“We remain hopeful that the transaction will be approved,” a Softbank spokesperson said in an e-mailed statement.
The sale of Arm is under heavy scrutiny, because its chip designs are used in everything from phones to vehicles to factory equipment, making neutrality the foundation of its business model.
The world’s biggest tech companies rely on Arm technology, and they fear they could lose unfettered access under Nvidia.
Tech giants have lined up against the takeover. A group that includes Qualcomm Inc, Microsoft Corp, Intel Corp and Amazon.com Inc have provided regulators around the world with what they believe is enough ammunition to kill the deal, people familiar with the process said.
In addition to needing approval in the US and China, the Arm purchase needs clearance from the EU and the UK, both of which are studying the deal closely.
The initial agreement between Nvidia and Softbank expires on Sept. 13 — two years after it was forged — but it would automatically renew if approvals take longer.
Softbank and Arm are entitled to keep US$2 billion Nvidia paid at signing, including a US$1.25 billion breakup fee, whether the deal goes through or not.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to