The UK government will study the national security implications of the purchase of British chip designer ARM Holdings from US group Nvidia (NVDA.O), it said Monday, questioning the $ 40 billion deal.
Digital Minister Oliver Dowden said Monday that he had issued the so-called “intervention notice” on the sale of ARM by the Japanese SoftBank (9984.T) to Nvidia.
“As a next step and to help me gather relevant information, the UK’s independent competition authority will prepare a report on the implications of the transaction, which will help inform any other decision,” he said.
Nvidia said it did not believe the deal posed any material national security issues.
“We will continue to work closely with the British authorities, as we have done since the announcement of this agreement,” said Nvidia, the largest chip company in the United States by market capitalization.
ARM is a major player in global semiconductors, a key sector for technologies, from artificial intelligence and quantum computing to 5G telecommunications networks.
The semiconductors also support Britain’s critical national infrastructure and engage in technologies related to national defense and security, the government said, adding that security community officials had informed the decision to intervene.
The Competition and Markets Authority will assess the impact on competition, jurisdiction and national security of the agreement, with a report to be submitted before July 30, according to the government.
Dowden will then decide whether to draft the agreement, with or without commitments from the companies involved, or refer it to a longer, in-depth investigation.
The takeover, which was announced in September, puts vital supplies to multiple silicon chip makers under the control of a single player.
ARM, which was founded and is still headquartered in Cambridge, England, does not manufacture chips, but has created an instruction set architecture on which the design of computer cores is based.
Its chip designs and technology are licensed to clients such as Qualcomm Inc. (QCOM.O), Apple (AAPL.O) and Samsung Electronics Co. Ltd. (005930.KS).
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