Four years after swallowing Arm Holdings, SoftBank said to be mulling Brit chip biz sale

Insider suggests company doesn't charge enough in royalties to satisfy Japanese giant

Troubled Japanese conglomerate SoftBank is reportedly exploring the possibility of offloading Arm Holdings, the iconic British chip designer acquired in 2016 for £23.4bn (or $32bn at historic exchange rates).

Reports citing internal sources claimed SoftBank is considering a full or partial sale. Goldman Sachs is said to be advising.

Founded in 1990, Arm Holdings designs the power-sipping chipsets used by the majority of smartphones. As Arm chips have closed the performance gap with Intel's x86 architecture, Arm's silicon has started to appear on server, desktop, and laptop computers. Most recently, Apple announced it would start switching Mac computers to its own homegrown Arm-based Apple Silicon.

Since acquiring Arm Holdings in the months following the Brexit referendum in summer 2016, SoftBank has gradually chipped away (sorry) at the business, selling a majority stake in Arm China to a local investment group for $775.2m.

Softbank also flogged a quarter of the main business to the Saudi Vision Fund for £6.5bn.

In recent months, whispers in Silicon Valley have suggested that SoftBank may raise money by taking Arm Holdings public, with an IPO mooted for 2023.

Talk of future directions comes during a period of turmoil for SoftBank, which has faced huge losses in its Vision Fund venture capital vehicle. This is partially due to its sizeable stake in WeWork, which, prior to its abortive IPO attempt, was valued at $47bn before crashing to $2.9bn.

SoftBank CEO Masayoshi Son has since described the firm's WeWork investment as "foolish".

In addition to WeWork, Softbank's Vision Fund also holds stakes in Zume (a robotics firm which initially existed as an automated pizza delivery firm, before shifting to more conventional fare) and perennially loss-making ridesharing firm Uber.

Its most valuable holding is its stake in Alibaba; in May the group said it would raise $11.5bn from contracts to sell shares in its holding. Alibaba co-founder Jack Ma retired from SoftBank's board in June.

Just last month SoftBank most recently sold a significant portion of its investment in T-Mobile US, raising $14.8bn from the sale of 198 million shares.

SoftBank's reported eagerness to shift Arm Holdings may be more fundamental than its current financial woes. Speaking to The Register, one company insider said SoftBank was dissatisfied with Arm's business model and wanted it to charge more for royalties.

As a "fabless" semiconductor firm, Arm doesn't actually make any chips itself, but grants other firms – like Qualcomm and MediaTek – the right to produce its designs under licence. ®

Similar topics

Other stories you might like

  • DigitalOcean tries to take sting out of price hike with $4 VM
    Cloud biz says it is reacting to customer mix largely shifting from lone devs to SMEs

    DigitalOcean attempted to lessen the sting of higher prices this week by announcing a cut-rate instance aimed at developers and hobbyists.

    The $4-a-month droplet — what the infrastructure-as-a-service outfit calls its virtual machines — pairs a single virtual CPU with 512 MB of memory, 10 GB of SSD storage, and 500 GB a month in network bandwidth.

    The launch comes as DigitalOcean plans a sweeping price hike across much of its product portfolio, effective July 1. On the low-end, most instances will see pricing increase between $1 and $16 a month, but on the high-end, some products will see increases of as much as $120 in the case of DigitalOceans’ top-tier storage-optimized virtual machines.

    Continue reading
  • GPL legal battle: Vizio told by judge it will have to answer breach-of-contract claims
    Fine-print crucially deemed contractual agreement as well as copyright license in smartTV source-code case

    The Software Freedom Conservancy (SFC) has won a significant legal victory in its ongoing effort to force Vizio to publish the source code of its SmartCast TV software, which is said to contain GPLv2 and LGPLv2.1 copyleft-licensed components.

    SFC sued Vizio, claiming it was in breach of contract by failing to obey the terms of the GPLv2 and LGPLv2.1 licenses that require source code to be made public when certain conditions are met, and sought declaratory relief on behalf of Vizio TV owners. SFC wanted its breach-of-contract arguments to be heard by the Orange County Superior Court in California, though Vizio kicked the matter up to the district court level in central California where it hoped to avoid the contract issue and defend its corner using just federal copyright law.

    On Friday, Federal District Judge Josephine Staton sided with SFC and granted its motion to send its lawsuit back to superior court. To do so, Judge Staton had to decide whether or not the federal Copyright Act preempted the SFC's breach-of-contract allegations; in the end, she decided it didn't.

    Continue reading
  • US brings first-of-its-kind criminal charges of Bitcoin-based sanctions-busting
    Citizen allegedly moved $10m-plus in BTC into banned nation

    US prosecutors have accused an American citizen of illegally funneling more than $10 million in Bitcoin into an economically sanctioned country.

    It's said the resulting criminal charges of sanctions busting through the use of cryptocurrency are the first of their kind to be brought in the US.

    Under the United States' International Emergency Economic Powers Act (IEEA), it is illegal for a citizen or institution within the US to transfer funds, directly or indirectly, to a sanctioned country, such as Iran, Cuba, North Korea, or Russia. If there is evidence the IEEA was willfully violated, a criminal case should follow. If an individual or financial exchange was unwittingly involved in evading sanctions, they may be subject to civil action. 

    Continue reading

Biting the hand that feeds IT © 1998–2022