The ARM-Nvidia merger will significantly disrupt the entire microprocessor market, especially since the IT industry is currently going through a real tectonic movement with the development of the Internet of Things, 5G, Edge computing and even more. high performance computing.
However, ARM products are thriving in precisely those areas where strong growth prospects are expected. By combining its know-how with the ubiquity of ARM in the mobile chip market, whose technology is found in 95% of smartphone chips, Nvidia seeks nothing more and no less to become the absolute giant of artificial intelligence, autonomous mobility, the industry of the future or the connected city. Importantly, in the longer term, the new post-acquisition Nvidia could benefit greatly from ARM's technology in the race for new computational paradigms. While Europe has quite rightly identified quantum as the next step in computing, cybersecurity or communications, it would lose a precious asset.
Europe as a playground
The ARM-Nvidia merger, and more broadly the semiconductor industry, is therefore undoubtedly at the heart of the power of tomorrow. Washington has fully realized the impact of this purchase in the technology race against Chinese flagships, as evidenced by Huawei's dependence on Kirin 990 smartphone processors (the first 5G chip with 7 manometers) which, although designed by the Huawei subsidiary HiSilicon, are all based on the ARM architecture. The Trump administration aspires to consolidate its technological independence while paralyzing its rival: In any case, this is illustrated by the approach of Washington, which has come to convince - firmly ... - the Taiwanese TSMC to invest $ 12 billion in the creation of a factory in Arizona but also the recent decision of the US Department of Commerce to impose export restrictions against the main Chinese semiconductor producer SMIC, citing unacceptable risks. Unsurprisingly, the Nvidia / Arm merger is a continuation of these actions.
In reaction, Beijing is now seeking to block this takeover, which would provide the United States with a new means of harming China: Chinese regulators will use antitrust procedures, possible following the creation of the ARM China joint venture in 2018, in order to ensure that the agreement does not distort the play of “free” competition - and especially their interests. Note that China is not at its first attempt since two years earlier, Beijing had already vetoed the plans of the American Qualcomm and its attempt to buy out the Dutch NXP Semiconductors for 44 billion dollars.
In this context, the main interested party shines by its absence without realizing the eminently strategic stake of such agreements. Europe appears to be a playing field where the great technological powers come to consolidate their dominant positions: What an irony of fate to see that it could be China which prevents European nuggets from falling into the hands of the American tenors! Like China, the EU must take up the issue and bring ARM back to the European flag, both to avoid a certain dependence on the Americans, but also to get out of this harmful trend that has Europe to spend a lot of money to recreate something that was once in its possession.
A pernicious naivety
The acquisition has yet to be approved by several regulatory bodies, including the United Kingdom and the European Commission. Among the alternatives, Hermann Hauser, co-founder of ARM, is seeking financial backing from Downing Street to bring the company to the London Stock Exchange and once again make it a UK company open to investors. And why not, in addition or in parallel, not form a European consortium, which could be supported by the European Investment Bank and the main manufacturers in the sector such as NXP, STMicroelectronics, Infineon, or even the Dutch ASML - and invest in the English group, in an approach similar to the British during the takeover of the satellite operator OneWeb?
Europe must put an end to this pernicious naivety and move from speech to action. The EU must defend its strategic interests, as well as its own values, to guarantee its long-term strategic sovereignty. But that requires more proactivity and anticipation on these critical issues.