July 18, 2016
ARM Holdings Plc., the largest and most well known UK semiconductor firm, is being acquired by Japanese internet giant SoftBank Group Corp. for $32 billion. Analysts say the deal is part post-Brexit value shopping and part smart business.
Considered a test case, the deal offers SoftBank real advantages, including ARM’s ubiquitous chips and related patent portfolio. ARM is one of the few companies with sizable business outside of the U.K. Roughly 52% of ARM’s customers are in Asia, 38% in the U.S., 9% in Europe and only 1% in the U.K.
Cambridge-based ARM’s chips are in 95% of the world’s smartphones. ARM doesn’t manufacture chips, the company licenses its designs to companies, so it doesn’t sink capital into building expensive fab plants.
The deal may help ARM diversify into emerging Internet of Things (IoT) technologies, such as a host of automobiles, consumer electronics, homes, building and other emerging platforms.
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