In a refreshing perspective, Lenovo Group’s former Chief Engineer Ni Guangnan believes that China will block Nvidia’s acquisition of ARM. Speaking at a forum in Zhengzhou, he says that China would not be comfortable using the architecture of ARM holdings if it is owned by a US-based company.
As per a report from SCMP, Ni says the Chinese Commerce Ministry will reject the acquisition. He adds that China’s Anti-trust regulator will cite the monopoly in the supply of chip design tools as a reason. However, insiders think that fear of technology coming under the ambit of the USA’s export control regulations is the reason.
Previously, both ARM and Nvidia announced a deal worth $40 billion a few weeks ago. Accordingly, Japan’s SoftBank owned ARM holdings will go into the hands of America’s MNC Nvidia Corporation.
Besides, Just like Ni says, two Intellectual Property architectures are widespread in the semiconductor industry. One of them is America’s Intel invention and the other Cambridge-based ARM. Several companies use these architectural designs to make a wide variety of chips for PC, Smartphones, and other IoT devices. ARM shortly asked employees to stop working for Huawei after the US ban before reversing the decision. It realized that its technology is of UK origin and not US.
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If we take ARM, it has its root in Cambridge, UK. The report says after 18 years of entering China, ARM now draws about 20% of revenue from Chinese companies and has an absolute presence in the region. Also, according to the ARM China website, its license has been used to ship close to 19 billion devices as of September.
Further, the report also says China imported chips worth $44 billion in 2019 as opposed to $29.3 billion in 2013. That said, if the ARM falls in the hands of Nvidia, it will be detrimental to China as it has to clear the hurdles put forth by the US.
USA is pressurizing China by banning Huawei’s 5G equipment, export of SMIC, and advocating others to do so. However, Ni is certain that China will catch up in the world of Semiconductors as soon as possible. He also says that the country has the task of building an information ecosystem rather than a single product.
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