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Arm had three parents when it was founded in 1990 – Acorn Computers, VLSI Technology and Apple.
The other two are long gone and although Apple still had 14.8% of Arm in 2002, if it had any shares left in 2016 then presumably Softbank bought them.
But now an increasingly debt-burdened Softbank is looking to divest Arm via an IPO.
As when Toshiba sold its memory unit and Apple took a share wanting to secure its source of NAND, Apple might see an IPO of Arm as an opportunity to get Arm back in the corral either via an outright buy or by taking a major share.
Arm is not as simple a corporate entity as it was – 25% is owned by the Vision Fund and its China unit is majority owned by Chinese funds, but the development of its cores is done in the USA and UK.
At the moment, anything engineered by Arm in the US cannot be freely used in China under the Trade War restrictions, but UK-engineered IP can be used in China without restriction.
But if Apple took ownership, or a majority stake, in Arm, then Arm would come under US law and nothing Arm produces could be used in China without conditions imposed by the US government.
China has some significant mobile phone manufacturers and mobile phones rely on Arm cores.
So Arm’s upcoming IPO could spawn some intriguing dilemmas.
Well congratulations to the Blue Anchor at Helston and to Spingo – may they have a magnificent trade.
That is true Pete, but Arm China is not much use to China if it doesn’t get Arm’s latest IP which comes from the UK and US. The US developed IP is already under the control of the US, and a change of ownership could affect the supply of IP from Cambridge to Arm China.
I think you’re right, Pepe, but the value of Arm resides in its new IP. This is partly developed in the US, and so subject to US controls, and partly in the UK which has no controls unless and until either the US asks Japan to put on controls, or the promised IPO results in the dominant shareholding being US-owned whereupon the US could impose controls. Of course 25% of Arm’s shareholding is in the Vision Fund and God knows who owns that. But an IPO would throw the ownership wide open,
It begs the question as to why UK or European/UK investors would be unable to bid for ARM. The US has proven to be very fickle in these matters over the last few years. London is alleged to be the world’s foremost financial centre, so why not?
(Temporary change of moniker to celebrate the imminent reopening of The Blue Anchor in Helston, home of Spingo and probably the world’s oldest micro-brewery)
An excellent point BringBackGermsnium, would other mobile phone makers want to license a core from a rival phone producer? Probably not. But would Apple (revenues $260bn) care about losing the Arm revenue stream ($1.6bn)? Probably not. Indeed, the loss of Arm’s revenues might seem small compared to the pleasure Apple would get watching its mobile phone rivals adapt to a new core.
If ARM is sold I’d rather it wasn’t Apple who got hold of it. But I would be delighted to see ARM taken out of China no matter how. They don’t deserve access to world-beating products after what they’ve done to the world.
I don’t think it’s possible to take ARM out of China. ARM China is 51% owned by Chinese investors. From a Chinese point of view this seems that a smart move, given what the US has done to the world.
I dont think SoftBank want RISC-V to become the dominant architecture after investing 32 billion dollars.
China is one the key markets for ARM in there is no way that they are gonna let lose that market. So selling it to Apple is not in the best interest of the SoftBank, I think they prefer to lose some IP to China to that lose market to an Open Architecture.
When Softbank bought ARM, customers started looking for alternative suppliers, because ARM had always been prized for its independence. If Apple bought out ARM, the same would surely happen again, but more so. It would give Apple an asset that would be very difficult to value.
ARM LEGS it .. ( back to the US ) ?
Well the restrictions apply to software and semiconductor IP is software, Pepe, and ARM IP is developed in the US and UK so I assume US Trade Restrictions apply to US-developed IP but not UK-developed IP.
There’s an ST range of MCUs – the H7 series – that has been the subject of a legal battle for about a year. These have an ARM encryption unit in them which the US says is protected technology, whilst ST and ARM say its not. But I had to sign a 50 page waiver promising not to send them to Russia or China to get some samples last year.
Likes the ones that you can find in Alibaba at 15 dollars? That is crazy.
I even think the Gigadevice produce similar microcontrollers.
Not the H7 series – that’s way beyond them. But yes you can now buy the H7 devices from both Russia and China 🙂
Didn’t trade restrictions only apply to selling “things” made or designed in the US or by US citizens?
So even if God forbid Apple has a majority stake, the IP is still being made in the UK, so i don’t think is subject to US restrictions.
But i really hope that that the scenario don’t happen, no just for the export restrictions, is because Apple is a really in my opinion an evil company. If they take over ARM it will be very tempting to try to disrupt the Android ecosystem. But if that happen all my bets will be in RISC-V.