The opposition Labour party has called for the UK government to intervene in the potential acquisition of British chipmaker ARM Holdings plc by US graphic card maker Nvidia Corporation (NASDAQ:NVDA) to prevent the firm’s headquarters being moved out of the country.
Shadow business secretary Ed Miliband said the government “cannot ignore the threatened takeover of British tech success story ARM”, highlighting that as the company licenses its chip designs to many of Nvidia’s competitors, the firm’s growth could be limited following any acquisition.
“If the government truly believes in an active industrial policy, it cannot be right that they are ignoring the potential consequences of this takeover, including the possible implications for where the company is headquartered and the thousands of jobs in Britain that depend on it”, Miliband was quoted as saying in a Financial Times report.
“The government should show leadership and seek legally binding assurances from Nvidia should it take over the company to keep Arm headquartered in the UK rather than see jobs and decision-making moved across the ocean”, he added.
Concerns about a potential takeover of ARM have been circulating since July, when Masayoshi Son, the head of ARM’s current owner Softbank, said the Japanese investment fund is considering selling the company as part of a strategy to boost its cash balances and recover from a historic loss earlier in the year amid the coronavirus pandemic.
SoftBank bought ARM in 2016 for around US$32bn as part of an aggressive investment strategy that has since been reigned in, so any sale is likely to come in above the number.
Founded in 1990 as a joint venture by Acorn Computers, Apple Inc (NASDAQ:APPL) and integrated circuit maker VLSI Technology Inc, ARM computer chips are now considered to be synonymous with smartphones and other mobile devices. It has also ballooned in value to become the UK’s most valuable tech company.
Companies using the firm’s chips include Apple, Samsung, Qualcomm and MediaTek, as the group will license its chips to anyone willing to pay, which can then be edited to the customer’s specifications.
Shares in Nvidia were up 1.9% at US$502 in pre-market trading in New York on Friday.