China state media outlet calls Nvidia’s Arm purchase ‘disturbing’, urges regulatory caution

The logo of technology company Nvidia is seen at its headquarters in Santa Clara
FILE PHOTO: The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith

September 16, 2020

SHANGHAI (Reuters) – An op-ed in China’s state-backed Global Times on Wednesday said U.S. chipmaker Nvidia Corp’s <NVDA.O> planned acquisition of Arm Ltd from Japan’s SoftBank Group Corp <9984.T> was “disturbing”, urging global regulators to exercise caution as they evaluate it for approval.

“Given the U.S.-China tensions and U.S. suppression on a range of Chinese technology enterprises, if Arm falls into U.S. hands, Chinese technology companies would certainly be placed at a big disadvantage in the market,” said the op-ed, the author of which was not named.

SoftBank said on Monday it had agreed to sell Britain-based chip designer Arm to Nvidia for as much as $40 billion in a deal set to reshape the global semiconductor landscape.

The Global Times op-ed said Chinese companies put on the U.S. “entity list” risk getting cut off from using Arm-based chips, while European companies using Arm might also face difficulties supplying China.

In May 2019, the U.S. department of commerce placed Chinese tech giant Huawei Technologies Co Ltd on a list of companies that American firms are barred from supplying and servicing.

Before Nvidia can assume full control of Arm, anti-monopoly regulators in major markets must signal approval of the transaction.

In 2018, U.S. chipmaker Qualcomm Inc <QCOM.O> reversed its planned acquisition of Netherlands’ NXP Semiconductor NV <NXPI.O> after Chinese regulators declined to approve it.

(This story changes wording in headline to “caution” from “intervention”, and in first graf to “exercise caution” from “stop”)

(Reporting by Josh Horwitz; Editing by Kenneth Maxwell)