back to article Softbank promises stronger ARM: Greater overseas reach and double the UK jobs

Brit-tech success poster child ARM holdings is to be acquired by Japanese telecom multinational Softbank. ARM, whose chip designs drive the majority of the world’s smartphones, is under offer for a remarkable £24.3bn - a premium of 43 per cent over current stock price. Softbank, whose last yearly revenue totalled 19.5 …

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A week is a long time in politics

Seven days ago, May said that strategic British businesses would be protected from foreign takeover. Given what's already gone, I can't think of anything more strategic than ARM. So today Hammond says this means everything's great.

If Germany had an ARM, they wouldn't have let this happen.

The UK is at risk of having everything worthwhile bought up and dragged over the border.

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Re: A week is a long time in politics

Germany has fabs. Real men have fabs.

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Re: A week is a long time in politics

The Dresden fabs are now owned by GlobalFoundries, who in turn are owned by the Emirate of Abu Dhab. So not much more then the physical fabs.

Note that the fabs (when built by AMD) where subsidized from Germany (and the state of Saxony) to the tune of 545 million Euros.

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Re: A week is a long time in politics

The UK is at risk of having everything worthwhile bought up and dragged over the border.

Already happened, many times over. e.g. In 1945 the largest sector in the UK was the aviation industry. Went to Farnborough airshow at the weekend - not a single British plane there except for a few antiques.

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Re: A week is a long time in politics

The UK is at risk of having everything worthwhile bought up and dragged over the border.

It has always been like that. We have the brilliant ideas and the ability to get them started but when support is needed to take them world wide it is not there. The department of trade and industry (or whatever its called now) and the foreign office are as useful for support as the proverbial chocolate teapot, and it is required today in the world of globalisation.

For some reason that I have never been able to fathom the government will bend over backwards to support the intangible 'industries', banks and the city, but not someone that actually gets their hands dirty by actually making things and this applies to both main parties. I expect that as soon as Reaction Engines have proved their engine the whole Scylon project will move overseas because the funds necessary to complete the project will not be there in the UK.

It has always been thus.

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Anonymous Coward

Re: A week is a long time in politics

Considering the post-Empire delusions of grandeur and importance that remain entrenched in Middle English types who dominate the cultural and political direction of the United Kingdom, it always seemed ironic that the same types- or at least the people they voted for- seem inordinately keen on selling off national assets (which inevitably end up in the hands of foreign interests) for pennies on the pound.

As others have observed, this isn't new. Going back to the 80s Thatcher years, it always seems to have been the case that the Tories (and the post-Thatcher New "Labour"-in-name-only) have been perfectly happy to observe- and encourage- foreign takeover of UK companies that threaten to grow to any size of importance.

The Theresa May speech referenced may at first have seemed atypical in this respect, but as always, one judges the Tories by what they do and say in practice, not in airy speeches of principle. (#) Philip Hammond's crowing of this post-Brexit takeover as a good thing shows that everything remains comfortably consistent in practice.

(#) The most notorious example of this being, of course, Thatcher's One-Nationesque "where there is discord, may we bring harmony" speech upon her election. This coming from someone who went on to become not only one of the most divisive leaders in recent history, but one who was *intentionally* divisive, playing up "them and us" and demonising of whole segments of society. It will be understood why I was reminded of Thatcher's speech when Theresa May made similar touchy-feely One Nation noises upon *her* election. Not because she's a woman and tediously compared to Thatcher- the latter was the first PM I remember and thus her (and May's) gender wasn't and isn't an issue to me- but because it's an echo of such blatant hypocrisy by a party I don't believe to have changed its spots one bit.

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Re: A week is a long time in politics

This is the same Ms May who so often goes on about the unelected and who campaigned for a general election after Gordon Brown was made PM after an uncontested party leadership change.

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Re: A week is a long time in politics

Creating new companies and selling them to foreigners for mountains of money sounds like a pretty good business to be in.

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Linux

Re: A week is a long time in politics

I don't think there is any inconsistency in the fact that successive governments will favour banking and finance over engineering and manufacture. The only concerns that ultimately profit from foreign acquisitions are the shareholder and (global) banker class whose interests I must sadly conclude our governments represent, and by that I mean the ones that have held power since 1979. If they want something to happen, they present it to us as a force of nature they have no control over. Nothing is further from the truth - they have had ample time - years in fact, to sort this situation out.

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Re: A week is a long time in politics

Well yes, it has happened many times before, but the UK aviation industry in 1945 had been driven by, thankfully, unusual circumstances for the preceding 6 years.

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Meh

Re: A week is a long time in politics

Well yes, it has happened many times before, but the UK aviation industry in 1945 had been driven by, thankfully, unusual circumstances for the preceding 6 years.

Until 1966, more than 20 years after the Second World War ended, as the trade show of the Society of British Aircraft Constructors, the Farnborough Airshow exhibited only British aircraft.

In 1964, it included VC10 and Trident airliners, Hunter and Lightning fighters, Vulcan bomber, BAC 221 delta wing plane, Harrier jump jet prototype, Turbo Skyvan and Andover transports, Jet Provost and Gnat trainers, HS 125, Hawker Siddeley 748, Beagle, Handley Page Herald, Shorts Belfast etc.

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Uh-oh

This isn't gonna end well.

RIP to all those ARM jobs then.

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Joke

Re: Uh-oh

It's like a HAND job, but much more vigorous.

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Re: Uh-oh

At least its not a RIM job. Those are hard to cum by these days.

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"vote of confidence in the British economy"

More like the result of the vote of no confidence that manifested itself in the drop in the pound. Any decent home-grown companies we might have had left are now in the bargain basement.

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TRT
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Hm... grab possibly the only grabbable vital component of a massive global market. Wise move. Before the UK makes a lash of it (possibly). Safeguard the jewel in the crown.

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Apparently, ARM management have been talking to this particular company for some time. The value of the pound has only sped up the timing. The problem is that our governments allow this to happen.

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Anonymous Coward

Softbank and ARM been talking for two weeks, according to the news today...

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Anonymous Coward

What some crown jewels? They're going cheap.

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Seen it all before.

Every time this happens the same noises are made, the same assurances given to the Government by the buyer, and then a few years later come the job losses, the moving of operations overseas and the loss of yet another great British business.

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Re: Seen it all before.

|Given that almost all the hardcore engineers work in or around Cambridge, it's not going to be easy to move the jobs overseas. People in Cambridge don't like change, as shown by the shit infrastructure that hasn't improved in 35 years.

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Re: Seen it all before.

Given that almost all the hardcore engineers work in or around Cambridge, it's not going to be easy to move the jobs overseas.

I think the Cortex A72 design was done in Austin, Texas and the A73 was developed in France.

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Re: Seen it all before.

The engineers might stay, the profits won't. It's going to be near impossible to stop a foreign owned, purely IP licensing business deciding where it feels like paying even minimal amounts of tax. Just needs the sales staff to be somewhere else.

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Re: Seen it all before.

So what do you recommend as a solution? If the UK government blocks foreign companies from buying UK companies, people will be less likely to start companies in the UK in the first place, because it makes them worth less when they can only be purchased by other UK companies.

This might be a reasonable strategy for something like defense companies, or their suppliers. But if you try to apply to any "big" UK company you'd just hurt yourself in the long run.

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Re: Seen it all before.

So what do you recommend as a solution?

Good question; and the answer would seem to require compromise.

Perhaps rules on the amount of foreign ownership of a native company which is allowed, so they can benefit from investment, we can benefit from that investment, but we reduce the risk of having the rug pulled from under our feet.

We do that anyway with rules which prevent single companies taking control of an entire sector and governments will often retain 51% control of critical industries.

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Unhappy

Open for business...

Or a clearance sale?

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Re: Open for business...

The vultures (no offence meant) are circling.

Seen it all before. This is the whole business with Acorn all over again - those with only the bottom line in their best interest go after the money and will swallow any bullcrap in order (or ordure) to get their big payoff. Then the new parent decides that they don't want to keep the product in its original place and shift it overseas, always assuming that they keep it going at all (OK, it's unlikely that ARMs will cease to exist any time soon, but there are precedents).

Great. Super. (Yes, CJ)

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I expect Imagination is feeling rather unwanted

It would have beem a more obvious candidate for a takeover - and considerably cheaper.

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Re: I expect Imagination is feeling rather unwanted

They could certainly do with some (long-term) help, especially if their MIPS IoT offering is to make any significant impact.

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Re: I expect Imagination is feeling rather unwanted

Perhaps with the fall in the £ vs $ rate, it might temp Apple to buy them up

Cue much gnashing of teeth by the apple haters but this is business.

Anything of value here is now even more attractive post BREXIT for any overseas investor with the money (or even without it...)

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Re: I expect Imagination is feeling rather unwanted

Apple tend to pick off the carcass once a firm has gone bust; so they'll wait (unless someone else steps in). But the doubling in head count at ARM might accelerate that: as the Imagination guys and gals jump ship.

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Re: I expect Imagination is feeling rather unwanted

Care to provide some examples where Apple "pick[ed] off the carcass once a firm has gone bust"?

Apple in fact tends to want to buy small pre-IPO companies for their technology or personnel. While they use Imagination GPUs, they also hired some top GPU designers who fled ATI after AMD bought them a few years ago, so there are persistent rumors that Apple will eventually design their own GPU core, just like they design their own ARM CPU cores.

To the extent Apple would be interested in buying Imagination, they'd only want the GPU related IP and engineers, not all the MIPS stuff, the outside licensing business and sales staff, etc. If they bought them they'd probably partner with someone else who was interested in that other stuff Apple isn't, and divide them up. But I think Apple buying them at all is unlikely, I'd say odds are good Apple will introduce their own design GPU core either this fall or next.

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jzl

ARM is a strategic asset

And should be treated accordingly.

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Re: ARM is a strategic asset

It's also private property, not covered by any particular legislation (for example, the laws refusing the selling of weapons to some bloke in the pub). If the gubbermint is permitted to tell people that they may not sell their private property to Softbank, is the taxpayer prepared to reimburse the shareholders for the lost sale?

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Re: ARM is a strategic asset

NO! We aren't in TTIP just yet. Thank fuck.

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Unhappy

Re: ARM is a strategic asset

"We aren't in TTIP just yet."

Yet

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Meh

Re: ARM is a strategic asset

It's also private property, not covered by any particular legislation (for example, the laws refusing the selling of weapons to some bloke in the pub).

The Government has a duty to protect the country's economic wellbeing. Banks, railways and energy companies are also private property, and the Government has certainly given itself a say there.

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Re: ARM is a strategic asset

"The Government has a duty to protect the country's economic wellbeing. "

Happy with that. If selling ARM will ultimately cost UK taxpayer, in however we choose to measure it, more than we will gain by allowing the sale, then UK taxpayer via the government should think it a good deal to beat the offer price and purchase the company for the benefit of the UK.

It's immoral to have it both ways; if it's worth keeping, it's worth paying up for. I recall the the UK government put its money where your mouth is by buying large pieces of banks, subsidising railway companies (and stepping in when they collapse) and making various commitments in energy (including the high price per kwHr for electricity from that new nuclear power station, although I lost track of that - is it still on?). Want to preserve ARM as a UK company? Pay up.

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jzl

Re: ARM is a strategic asset

The government has a duty to protect the country's entire wellbeing, both economic and non-economic. Ownership of ARM is ownership of the design of the most widely used microprocessor architecture in the world.

This is not an asset we should relinquish without national debate.

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Anonymous Coward

I see IMG shares up 10% too (probably because of the ARM bid) can see them being a target

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Anonymous Coward

Hope it goes well for them ....

Hoping it goes better with Japanese management than Socionext in the UK.

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Anonymous Coward

its Cadbury Schwepps all over again

just watch.

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Re: its Cadbury Schwepps all over again

Yes, I was thinking the offer to double the workforce sounded like a Krafty move.

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Anonymous Coward

"ARM, whose chip designs drive the majority of the world’s smartphones"

[sigh]

ARM, whose IP is in the chip designs that drive the majority of the world’s smartphones"

There, no charge for the correction.

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Re: "ARM, whose chip designs drive the majority of the world’s smartphones"

Pretty sure it is their chip designs that drive the majority of the world's smartphones. The ones using various ARM designed cores like the A57 and A72 outnumber custom non-ARM designed cores like Apple's A9 and Qualcomm's Kyro.

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jzl

Re: "ARM, whose chip designs drive the majority of the world’s smartphones"

Christ, it's not just smartphones. They're just the headline makers.

ARM cores power the majority of all manmade objects which require computational logic.

Did you know that Windows laptops usually have more ARM cores than Intel ones?

There's an ARM core in the Bluetooth controller and another one in the WiFi and yet another in the USB controller. Probably another in the display and another in the hard disk. Sometimes there's even one in the keyboard and one in the trackpad.

Then there's an ARM core or two in your washing machine. Several in your car. There's probably one in your boiler. Your internet router is almost certainly powered by a couple of ARM cores.

Your TV has one. There's an ARM cortex in your car's remote keyfob, and in the spare key too. There's one in your burglar alarm. There's one in your kitchen scales and another in your cooker.

Smartphones aren't even the tip of the iceberg.

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jzl

Re: "ARM, whose chip designs drive the majority of the world’s smartphones"

> "The ones using various ARM designed cores like the A57 and A72 outnumber custom non-ARM designed cores like Apple's A9 and Qualcomm's Kyro."

Kryo and Apple's A9 both implement the ARM instruction set. Apple and Qualcomm pay ARM royalties for the privilege.

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MJI
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Re: "ARM, whose chip designs drive the majority of the world’s smartphones"

PS Vita ARM CPU

Not seen an ARM chip in a keyfob yet

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Anonymous Coward

Re: "ARM, whose chip designs drive the majority of the world’s smartphones"

"Pretty sure it is their chip designs that drive the majority of the world's smartphones. "

Depends what you mean by "chip design".

The RTL code is ARM's. Along with possibly some physical IP.

But the synthesis and physical implementation/layout won't be.

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Is this the double size already announced or double the double size...

Frankly I suspect its a reiteration of the already planned growth.

In the long term this will be VERY bad for ARM and the UK:

the UK operation will be shut in favour of a more 'local' (or cheaper) option in China.

the profits will be offshored and no tax in the UK

the profits will be sucked up by softbank and not go into R&D so ARM will fail to keep ahead

The government should realise the strategic importance and block this.

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