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 …
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.
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.
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.
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.
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.
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.
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.
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.
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.
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)
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...)
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.
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?
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.
"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.
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.
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.
> "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.
"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.
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.
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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