ARM: Cadence could be right home for Apple reject

July 23, 2020 //By Peter Clarke
ARM: Cadence could be right home for Apple reject
Consumer giant Apple has turned down the opportunity of buying ARM from Japan's Softbank Group, but GPU vendor Nvidia is interested, according to reports.

However, other reports state Softbank is less keen on selling ARM to Nvidia. And one possibility is that EDA and IP company Cadence Design Systems Inc. could come through as potential home for the UK licensor of processor technology.

Softbank Group paid $32 billion for ARM back in 2016 in the hope of leveraging IoT to greater revenue and profits. Unfortunately, ARM's financial results have subsequently deteriorated making Softbank look more like a money-recycling conglomerate than a creator of value.

Softbank has said it is considering returning ARM to the public markets in 2023 but the company is under pressure to re-arrange its balance sheet more quickly. A sale of ARM to a single company or consortium might bring in more money than an IPO and be the fast solution Softbank needs.

Reports over recent days have revealed that Softbank Group approached Apple Corp. about the possibility of the consumer giant acquiring ARM. ARM is the supplier of processor architecture to Apple and this has helped the company pioneer the smartphone market. Apple is now applying the ARM architecture to its laptop computers (see More details emerge of Apple's eviction of Intel processors from PCs).

As we indicated previously, Apple is not a good home for ARM. It either destroys the key value proposition that ARM develops cores for many chip companies, or it requires Apple to add another model to its business portfolio (see Opinion: ARM's refocus is good; suits a sale). And adding such a business model could see Apple trying to supply competitors with IP; generally a messy situation and one that might necessitate attention from anti-trust authorities.

One thing that Apple ownership would prevent is a Chinese destiny for ARM. That is something that was not avoided in the case of Imagination Technologies (see Opinion: China has had its way with Imagination), another case in point where Apple's hiring of GPU engineers was a factor in the subsquent collapse and sell-off of the IP licensor. Nonetheless keeping ARM out of Chinese hands is likely becoming increasingly important to UK and US governments

Next: Nvidia has brass in pocket


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