ARM may not be known compared to Qualcomm, MediaTek and Intel. But 99% of smartphones and tablets worldwide use the ARM architecture. Today, ARM confirmed that the company accepted the offer from Softbank for more than $31 billion. Will such a big deal affect the chip field?
In this regard, the reporter contacted the experts in the chip field for the first time. They all said that the transaction has not yet seen the value that Softbank brings to ARM, and ARM will not change the licensing model of ARM for the time being. But it makes more sense for Softbank to focus on the development of artificial intelligence.
Chip pattern will not change accordingly
Today, the British chip design company ARM confirmed that the company agreed to accept the tender offer issued by Softbank Group. Softbank’s offer for this transaction exceeded $31 billion. The first big deal after the Brexit referendum is a big news for the industry.
For a long time, ARM has neither produced chips nor sold chips, but only sold chip technology licenses. Although the volume is small compared to Qualcomm, MediaTek and Intel in the industry. But 99% of smartphones and tablets worldwide use ARM architecture. Moreover, it is understood that all iPhones and iPads use ARM chips, and most Kindle readers also use this architecture.
According to official data, ARM-based chips have shipped more than 75 billion chips worldwide, covering applications such as sensors, smartphones and servers. ARM has more than 100 partners worldwide.
Thanks to the substantial increase in mobile smart terminals, ARM's profit in 2015 increased by 31% to $414.8 million, and revenue reached $968 million, an increase of 22%.
So, will the acquisition of Softbank be an impression on ARM and the chip field?
Gu Wenjun, an analyst in the chip field, told reporters that the value that Softbank brings to ARM is not yet seen, but more is the shareholder interest and return on investment.
For the chip industry, Wang Yanhui, secretary-general of the China Mobile Alliance, said that there is no impact on the chip industry. If Intel or Apple bought ARM, the impact may be greater. Softbank is an independent third party and an ARM customer. The impact is small.
Moreover, Wang Yanhui believes that ARM will not change the revenue model (by licensing the fee model) because of this acquisition, and the ARM R&D center in the United Kingdom and the United States, the acquisition success is only for the owner, the elite team and the operation mode will not A change has occurred.
Softbank: Benefit Winner
For ARM, the switch has changed. For the industry, the model has not changed. So, is this acquisition more from Softbank?
In an interview with the media, Japan’s Softbank Sun Justice constantly emphasized the concept of Softbank 2.0. In the 2015 financial report, from now on, Softbank is transforming from a Japanese company with global assets to a global company striving to achieve long-term sustainable development. And this concept of sustainable development and 2.0 includes two aspects: one is artificial intelligence; the other is the Internet of Things.
Sun Zheng believes that in the future, everything will be connected to the Internet of Things. In his opinion, there are three things that are very important: CPU, memory, and the speed of the Internet. In the field of concern, ARM is the area of ​​concern.
Let's take a look at Sun Zhengyi's investment standards. He has revealed that Softbank has two important criteria for investing and acquiring companies: one is strong technology; the other is the potential to become a regional market leader. ARM's technology is not blamed. According to ARM's financial report, in the fourth quarter of 2015, ARM licensed a total of 51 chip licenses, the main application direction: mobile computing, smart cars, security systems and the Internet of Things.
Last month, Softbank sold Alibaba's equity to cash in about $10 billion. At the end of the month, it sold shares of Finnish mobile game giant Supercell (Tencent's $8.6 billion acquisition of up to 84.3% of the shares) and prepared sufficient funds for the deal.
Softbank's acquisition of ARM has undoubtedly added a weight to its own bet on the Internet of Things.
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