US Sues to Block Chipmaker Nvidia’s $ 40 Billion Merger with Britain’s Arm, Auto News, ET Auto

California-based Nvidia is one of the world’s largest and most valuable IT companies, while Arm, owned by Tokyo-based Softbank Group Corp, creates and licenses designs and architectures. of microprocessors.

The United States is suing to block semiconductor producer Nvidia’s $ 40 billion merger with British firm Arm Ltd because the deal would undermine competition in the computer chip industry, the Federal Trade Commission said on Thursday. (FTC).

“The proposed vertical deal would give one of the largest chip companies control over the computer technology and designs that rival companies rely on to develop their own competing chips,” the competition regulator said in a press release, calling the chips “critical infrastructure”.

The move comes as the world faces a global semiconductor shortage, which has put the brakes on auto manufacturing and soaring prices for new and used cars. President Joe Biden has launched an effort to increase domestic production of chips to reduce the reliance of US industry on imports.

California-based Nvidia is one of the world’s largest and most valuable IT companies, while Arm, owned by Tokyo-based Softbank Group Corp, creates and licenses designs and architectures. of microprocessors.

Arm’s technology has been used in more than 180 billion chips shipped around the world and is also found in cloud computing and the Internet of Things.

Nvidia offered a moderate initial reaction to the lawsuit.

“As we enter this next step in the FTC process, we will continue to work to demonstrate that this transaction will benefit the industry and promote competition,” the company said in a statement to AFP.

The merger deal was announced in September 2020, and Nvidia said it would accelerate innovation and “build the first IT company in the age of artificial intelligence.”

Holly Vedova, director of the FTC’s Competition Bureau, said regulator was taking action “to block largest semiconductor chip meltdown in history to prevent chip conglomerate from choking pipeline innovation for next generation technologies “.

“This proposed deal would allow (…) the combined company to unfairly undermine Nvidia’s competitors” and ultimately drive up prices.

“The FTC lawsuit should send a strong signal that we will act aggressively to protect our critical infrastructure markets from illegal vertical mergers that have far-reaching and damaging effects on future innovations,” Vedova said in the communicated.

Nvidia stock closed up 2.2% for the day.

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