UK Government Should Stop ARM Sale To US – Hermann Hauser

The future of British chip-designer ARM Holdings remains uncertain, amid reports that a US firm is interested in acquiring it.

ARM is still based in the Cambridge, after it was acquired by Japanese giant Softbank in 2016 for $32 billion.

Its chip designs of course are used in most mobile processors around the world, but also in data centres, IoT, self-driving cars, and server rooms.

ARM sale

But after a series of investment missteps, ARM’s parent Softbank is now said to be in advanced talks to sell ARM to Nvidia, which last month overtook Intel to become the most valuable chip maker in the United States.

And amid talk of its possible sell-off, ARM has reportedly been looking to maximise its own earnings potential.

Last month ARM’s sales representatives reportedly pressed for price hikes that would boost overall license costs for some customers by as much as four times.

Those licence fee prices rises have reportedly prompted some licensees to consider non-ARM alternatives.

And now with ARM potentially at risk of being sold to a US firm, the man involved in the creation of the British chip designer has stepped into the issue.

Austrian-born entrepreneur Hermann Hauser was involved in spinning out Advanced RISC Machines (ARM) from Acorn Computers (which he had co-founded) in 1990.

In an interview with the BBC, he described ARM as the jewel in the crown of British tech and said it would be disastrous for it to be sold to a US firm.

He also said that he thought the UK government should intervene and that ministers should help make it an independent UK business again.

‘Unsuitable owner’

The BBC had contacted Dr Hauser and he reportedly said that a sale of ARM to Nvidia would be a disaster, but thought it very unlikely to happen.

But Dr Hauser then reached out to the BBC again to say the Nvidia reports now looked very credible and his concern had deepened.

Dr Hauser reportedly said that ARM’s business model – in which all the big chip-makers license its technologies – made Nvidia an unsuitable owner.

“It’s one of the fundamental assumptions of the ARM business model that it can sell to everybody,” Dr Hauser was quoted by the BBC as saying.

“The one saving grace about Softbank was that it wasn’t a chip company, and retained ARM’s neutrality,” he added. “If it becomes part of Nvidia, most of the licensees are competitors of Nvidia, and will of course then look for an alternative to ARM.”

It should be noted that Dr Hauser had voted against ARM being acquired by Softbank in 2016, but he admitted that at least the Japanese firm kept its promises to retain Cambridge as the main focus of ARM’s research and to boost employment there.

But he has little faith in that remaining the case if Nvidia takes over.

“It will become one of the Nvidia divisions, and all the decisions will be made in America, no longer in Cambridge,” Dr Hauser reportedly said.

Government action

“The great opportunity that the cash needs of Softbank presents is to bring ARM back home and take it public, with the support of the British government,” he said.

Dr Hauser reportedly added that he would like to see it listed on both the London and New York Stock Exchanges.

He reportedly acknowledged that an already financially stretched government could not be expected to provide cash for the deal, but could still encourage it to happen.

“It’s not about the money, it’s the industrial strategy statements that the government can make,” he said.

Dr Hauser pointed to the British government’s decision in July to invest $500m (£378m) in the satellite firm OneWeb, which may be a sign that it is prepared to intervene when the UK’s technology future is at stake.

And he thinks the UK’s wider microprocessor sector should be championed, pointing to the success of Bristol-based Graphcore in designing AI chips.

“[OneWeb was] a strong statement that the government is actually serious about industrial strategy,” Dr Hauser told the BBC.

“And if ever there was a big strategic prize to be had, it would be to take the crown away from Intel as the number one microprocessor company in the world and make it part of the UK”.

Both Softbank and Nvidia reportedly declined to comment.