Saturday, December 4, 2021

EU Investigates Nvidia Purchase Of Chip Designer Arm

LONDON (NWN) – European Union regulators on Wednesday launched an investigation into the $ 40 billion purchase of graphics chip maker Nvidia from Arm over concerns that it would limit competition, exacerbating global scrutiny of the deal.

The European Commission said it is concerned that the combined company will have the ability and incentives to restrict access to technology from the UK company Arm Ltd., whose chips are used in the vast majority of smartphones in the world.

The Commission, which is the EU’s highest antitrust authority, expressed concern that the deal would result in higher prices, less choice and less innovation in the semiconductor industry.

Nvidia Corp., based in Santa Clara, California, said last year that it is buying Arm from Japanese tech giant Softbank. The deal has sparked fears that Arm will abandon its neutral business model of licensing its chips to hundreds of tech companies, including many of Nvidia’s competitors.

“Our investigation is aimed at ensuring that companies operating in Europe continue to have effective access to the technology needed to produce modern semiconductor products at competitive prices,” said EU Commissioner Margrethe Vestager, responsible for competition and digital technologies. questions for the block.

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The commission said Nvidia had offered concessions to address prior concerns, but not enough to dispel “serious doubts” about the deal.

Arm sent requests for comment to Nvidia, which said it is “working closely” with the commission.

“We look forward to addressing their initial concerns and continue to demonstrate that the deal will help speed up the arms process and spur competition and innovation, including in the EU,” Nvidia said in a statement.

The commission must make a decision to terminate the transaction by March 15th. The EU’s concern echoes the UK’s competition watchdog, which has launched its own investigation. Earlier this year.

Nvidia has pledged to maintain Arm’s open licensing model and customer neutrality, maintain Arm’s headquarters in Cambridge, England, and expand its UK state. Nvidia previously said the purchase would not be completed until early 2022 due to pending scrutiny, including by US and Chinese regulators.

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