Tuesday, July 19, 2016

Softbank to acquire ARM Holding for $32 bn

Most of the microprocessors sold today are designed by ARM. ARM designs RISC microprocessors that are used in mobile phones, tablets other microcomputers. Single board computers like Raspberry Pi and Parallela also uses processors designed by ARM. ARM is a UK based company. 

Now yesterday reports have come in media that says the Japan's Softbank will acqurie ARM Holdings for a neat sum of $32 billion. Currently ARM Holdings has a revenue of $1.281 billion and an operational profit of $537 million. ARM is indeed a highly profitable company. Softbank's offer to acquire ARM indicates that it is betting on the future. The company is willing to pay a price that is almost 28 times ARM's current revenue. 

Actually Japan's Softbank has its eye set on the Internet of things, where every electronic device will be connected to each other and seamlessly share information among themselves. With the development in Deep Learning and AI, we can look forward to a future where we will have smarter televisions, refrigerators and microwave ovens. Softbank is surely aiming at this market and they are definitely expecting the market for low power consuming ARM processors to grow multiple fold. 

Softbank may also be aiming computer, supercomputer and server market of the future, if they develop faster processors. With this Japanese will be back in the microprocessor industry and can potentially lead the market of the future. Softbank is not a small company either it has a global revenue of $86.42 billion. 

The acquisition of ARM holdings will give them a foothold in the microprocessor and graphical processor industry, they are vital components for computing. We have to wait and see if this acquisition leads to some increase in the price of microprocessor which may lead to slight increase in the price of mobile phones and tablets. 

The acquisition will be the biggest acquisition made by any Japanese company.

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