SoftBank to grab chip designer ARM for $32 billion
ARM will continue to expand and to design chips for the phones you buy. SoftBank, meanwhile, is training its gaze on the internet of things.
Katie CollinsSenior European Correspondent
Katie a UK-based news reporter and features writer. Officially, she is CNET's European correspondent, covering tech policy and Big Tech in the EU and UK. Unofficially, she serves as CNET's Taylor Swift correspondent. You can also find her writing about tech for good, ethics and human rights, the climate crisis, robots, travel and digital culture. She was once described a "living synth" by London's Evening Standard for having a microchip injected into her hand.
Watch this: Chip designer ARM to be acquired by Softbank for $32 billion
SoftBank is headed for your smart home, or at least for a device you might use to control that home.
The Japanese telecommunications giant took a big step in that direction Monday with the announcement of its planned acquisition of chip designer ARM Holdings for nearly $32 billion (£24 billion).
ARM, based in the UK, is not as well-known as mega chip companies such as Qualcomm and Intel, but its work lies behind the processors inside many of the world's mobile phones. SoftBank, which is the majority owner of US carrier Sprint, intends to use ARM's chip knowledge to expand its internet of things division.
"ARM will be an excellent strategic fit within the SoftBank group as we invest to capture the very significant opportunities provided by the 'Internet of Things,'" said SoftBank CEO Masayoshi Son in a statement.
The internet of things is a catch-all phrase to describe how virtually every electronic object -- from thermostats to refrigerators to home security cameras -- will get embedded sensors and chips so that they're networked together and communicating, just as phones, tablets and laptops are. Analysts at Gartner expect the worldwide market to grow from 6.4 billion such devices this year to nearly 21 billion devices in 2020, with consumer uses accounting for the greatest number of connected things.
Among those uses: controlling and monitoring your home from your phone.
Gartner estimates that spending on services related to the internet of things will hit $235 billion in 2016, up 22 percent from last year.
ARM, meanwhile, continues to push the envelope on what chips can do. Its next computing and graphics processor architectures, due to show up in chips in 2017, are designed to let your phone run at high speeds for longer periods of time, produce richer images on high-resolution screens and be less taxing on batteries, the kinds of advances necessary for the coming wave of augmented-reality and virtual-reality games and other services.
Existing designs from ARM are the foundation for most of the world's mobile processors, including those made by Apple and Samsung. The company has said about 3 billion phones use its chips, and 1.5 billion more will be sold in 2016.
As part of the deal, SoftBank agreed to hire an additional 1,500 British employees over the next five years, as well as expand the company outside the UK. The chip specialist's business model, culture and brand will remain unchanged, the two companies said.
"There is a great alignment between the way we work and the way they think about the world," Simon Segars, ARM's chief executive, said in a video posted by the company.
The law firm Morrison & Foerster, which is representing SoftBank in the transaction, said the deal would be the largest investment in the UK by an Asian company and the biggest ever of a European tech target.
The acquisition is expected to be completed by November.