Arm and Qualcomm Eye Alphawave Acquisition for AI Chip Technology

Exclusive: Arm recently sought to acquire Alphawave for AI chip tech, sources say

NEW YORK/SAN FRANCISCO/LONDON, April 1 (Reuters) - SoftBank-owned chip tech provider Arm Holdings (O9Ty.F), opens new tab recently sought to acquire Alphawave (AWE.L), opens new tab, a UK-based supplier of semiconductor intellectual property, to secure a crucial technology that is crucial for building its own artificial-intelligence processors, according to three sources familiar with the matter. Alphawave, which has a market value of 707.1 million pounds ($913.36 million), has been working with its investment bankers to explore a sale after receiving acquisition interest from Arm and other potential acquirers, one of the sources told Reuters. Arm, however, has decided not to pursue a takeover of Alphawave after its initial discussions with the company, two of the sources said. Arm approached Alphawave recently with the aim of acquiring its technology that determines how fast information can get onto and off a chip, which is crucial for AI because chatbots such as ChatGPT and other applications can require thousands of chips strung together at once to operate smoothly. Known as "serdes" - short for serializer-deserializer - the tech is one of the competitive advantages Broadcom (AVGO.O), opens new tab boasts, which has helped it win AI chip customers such as Alphabet's (GOOGL.O), opens new tab Google and OpenAI. SoftBank and Arm declined to comment. Alphawave declined to comment. Alphawave has a joint venture in China called WiseWave that it operates with the Chinese investment firm Wise Road Capital, which American officials placed on a U.S. blacklist due to national security concerns last year. Arm's ties to China served to complicate its public listing in 2023, Reuters reported at the time. BIG BET ON SERDES UK-headquartered Arm, which is 90% owned by Japan's SoftBank Group (9984.T), opens new tab, does not make chips itself but sells the fundamental building blocks and other intellectual property. It generates revenue by billing companies for a license to use its tech and collects royalty payments for each chip sold. Through a range of tactics Arm has sought to improve its profit margin and expand revenue. These include exploring the idea of designing and selling a chip of its own, signaling a departure from its business of licensing intellectual property to other chip design firms and the possibility of competing directly with Arm's customers. Executives disclosed specifics about the company's fresh approach to its future plans during a December trial in a civil lawsuit over a contract with Qualcomm (QCOM.O), opens new tab. The plans disclosed during the trial included internal messages and documents that discussed the introduction of its own chip, though Chief Executive Rene Haas downplayed the comments. He said they reflected long-term strategic spitballing, in which executives often engage. In addition to the details revealed during the trial, Arm has also made a recruiting effort to identify and hire talent capable of launching a chip designed by the company, Reuters reported in February. Arm does not have SerDes technology - short for serializer/deserializer, which converts parallel data to serial data and vice versa for high-speed communication - as advanced as what Alphawave has built. Though little known, this technology serves as the foundation for Broadcom and Marvell Technology's (MRVL.O), opens new tab multibillion-dollar bespoke chip businesses, a market projected to grow to as much as $60 billion by 2028, according to a recent Bernstein report from Mark Li. Nvidia has also developed SerDes technology and has indicated it is willing to license it to other companies as part of the custom chip business it launched. Building powerful SerDes technology is crucial to making an AI chip that could stand out from rivals. Building SerDes from scratch requires a specific set of expertise and roughly two years to create, according to chip industry insiders. ($1 = 0.7742 pound) Reporting by Max A. Cherney in San Francisco, Amy-Jo Crowley in London and Milana Vinn in New York; Editing by Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence Milana Vinn Thomson Reuters Milana Vinn reports on technology, media, and telecom (TMT) mergers and acquisitions. Her content usually appears in the markets and deals sections of the website. Milana previously worked at GLG and PE Hub, where she spent several years covering TMT deals in private equity. She graduated from CUNY Graduate School of Journalism with Masters in Business Journalism. Max A. Cherney Thomson Reuters Max A. Cherney is a correspondent for Reuters based in San Francisco, where he reports on the semiconductor industry and artificial intelligence. He joined Reuters in 2023 and has previously worked for Barron's magazine and its sister publication, MarketWatch. Cherney graduated from Trent University with a degree in history.

Qualcomm eyes Alphawave after Arm backs from acquisition

Reports of widespread interest into Alphawave has shot up the company's share value. Chip designer Arm recently sought to acquire chip tech provider Alphawave, to secure the tech it needs to build its own artificial-intelligence (AI) processors, Reuters reported yesterday (1 April). Sources told the publication that Alphawave, co-headquartered in Toronto and the UK, has been working to position itself for a sale after Arm expressed an interest in buying the company. However, the deal did not go through after initial discussions between the companies. Later the same day, however, reports emerged that US-based chipmaker Qualcomm is considering making an acquisition offer to Alphawave. As per UK mergers and acquisition laws, Qualcomm now has 28 days to announce that it has either made an offer to acquire the company or that it has not. Reports of widespread interest into Alphawave in recent days sent the $1bn company's shares up by nearly 45pc since 1 April. Alphawave creates and licenses semiconductor technology, providing connectivity needs for hyperscale data centres, AI, 5G and autonomous vehicles among others. The company makes high-tech serialiser and deserialiser integrated chips, also known as 'SerDes', which make data transfer faster. The tech is crucial for companies competing in the AI sector, which not only require a lot of computing power, but also require them to operate smoothly. Arm, headquartered in the UK, is backed by the Japanese investment firm SoftBank, which owns 90pc of the company's shares. The company does not make its own chips, nor does it hold SerDes technology. In 2023, the company entered into a multi-year agreement with chip-maker Intel and Alphawave's competitor in the sector, to create mobile phone chips that contain Arm's cores along with Intel's foundry processes. Last year, Reuters exclusively reported that Qualcomm was exploring the possibility of acquiring portions of Intel's design business, although that deal seemed to have waned due to complexities associated with it. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

Arm recently sought to acquire Alphawave for AI chip tech, sources say

Arm approached Alphawave recently with the aim of acquiring its technology that determines how fast information can get onto and off a chip, which is crucial for AI because chatbots such as ChatGPT and other applications can require thousands of chips strung together at once to operate smoothly.SoftBank-owned chip tech provider Arm Holdings recently sought to acquire Alphawave, a UK-based supplier of semiconductor intellectual property, to secure a crucial technology that is crucial for building its own artificial-intelligence processors, according to three sources familiar with the matter. Alphawave, which has a market value of 707.1 million pounds ($913.36 million), has been working with its investment bankers to explore a sale after receiving acquisition interest from Arm and other potential acquirers, one of the sources told Reuters. Arm, however, has decided not to pursue a takeover of Alphawave after its initial discussions with the company, two of the sources said. Arm approached Alphawave recently with the aim of acquiring its technology that determines how fast information can get onto and off a chip, which is crucial for AI because chatbots such as ChatGPT and other applications can require thousands of chips strung together at once to operate smoothly. Known as "serdes" - short for serializer-deserializer - the tech is one of the competitive advantages Broadcom boasts, which has helped it win AI chip customers such as Alphabet's Google and OpenAI. SoftBank and Arm declined to comment. Alphawave declined to comment. Alphawave has a joint venture in China called WiseWave that it operates with the Chinese investment firm Wise Road Capital, which American officials placed on a U.S. blacklist due to national security concerns last year. Arm's ties to China served to complicate its public listing in 2023, Reuters reported at the time. Big bet on serdes UK-headquartered Arm, which is 90% owned by Japan's SoftBank Group, does not make chips itself but sells the fundamental building blocks and other intellectual property. It generates revenue by billing companies for a license to use its tech and collects royalty payments for each chip sold. Through a range of tactics Arm has sought to improve its profit margin and expand revenue. These include exploring the idea of designing and selling a chip of its own, signaling a departure from its business of licensing intellectual property to other chip design firms and the possibility of competing directly with Arm's customers. Executives disclosed specifics about the company's fresh approach to its future plans during a December trial in a civil lawsuit over a contract with Qualcomm. The plans disclosed during the trial included internal messages and documents that discussed the introduction of its own chip, though Chief Executive Rene Haas downplayed the comments. He said they reflected long-term strategic spitballing, in which executives often engage. In addition to the details revealed during the trial, Arm has also made a recruiting effort to identify and hire talent capable of launching a chip designed by the company, Reuters reported in February. Arm does not have SerDes technology - short for serializer/deserializer, which converts parallel data to serial data and vice versa for high-speed communication - as advanced as what Alphawave has built. Though little known, this technology serves as the foundation for Broadcom and Marvell Technology's multibillion-dollar bespoke chip businesses, a market projected to grow to as much as $60 billion by 2028, according to a recent Bernstein report from Mark Li. Nvidia has also developed SerDes technology and has indicated it is willing to license it to other companies as part of the custom chip business it launched. Building powerful SerDes technology is crucial to making an AI chip that could stand out from rivals. Building SerDes from scratch requires a specific set of expertise and roughly two years to create, according to chip industry insiders.

Chip Giants Arm, Qualcomm Target Alphawave To Capture AI Success Like Broadcom - Qualcomm (NASDAQ:QCOM), ARM Holdings (NASDAQ:ARM)

British chip designer Arm Holdings ARM explored snapping up semiconductor intellectual property supplier Alphawave. That is, until discussions collapsed. Qualcomm Inc QCOM, an Arm rival, also considered acquiring Alphawave, according to Reuters. Both companies are vying for serializer-deserializer technology. This type of tech enabled companies like Broadcom Inc AVGO to win AI chip customers like Alphabet Inc's GOOG GOOGL Google and OpenAI. Also Read: Slowdown And Tariff Talk Grips The Hottest Sector On Wall Street - Semiconductor ETF Now Has A Negative 1-Year Return The technology gained traction by enabling chatbots and other applications to operate smoothly by simultaneously stringing thousands of chips together. Arm's chips have gained traction among cloud computing companies as the electricity of AI data centers has surged over the years. Arm expects its data center central processing unit market share to reach 50% by the end of 2025, up from around 15% in 2024. Both Arm and Qualcomm supply companies with data center CPUs. Reportedly, Arm planned to boost prices by up to 300% and has discussed manufacturing its chips. It aims to increase annual smartphone revenue by ~$1 billion over the next ten years. Arm, majority owned by Japanese conglomerate SoftBank Group, recorded over 90% market share within the mobile applications market. According to Statista, it boasted a 65% share of the Internet of Things and embedded computing markets globally in 2022. Price Action: ARM stock is down 0.13% at $106.84 at last check Wednesday. Also Read: SoftBank Weighs $16.5 Billion Loan That Could Back OpenAI's $40 Billion Raise: Report Image: Shutterstock ARMARM Holdings PLC$107.370.36%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum25.72Growth-Quality-Value5.25Price TrendShortMediumLongOverviewQCOMQualcomm Inc$152.99-0.04%AVGOBroadcom Inc$169.770.74%GOOGAlphabet Inc$158.36-0.33%GOOGLAlphabet Inc$156.45-0.39%METAMeta Platforms Inc$585.00-0.17%SFTBFSoftBank Group Corp$52.00-%SFTBYSoftBank Group Corp$24.87-1.56%Market News and Data brought to you by Benzinga APIs

Arm and Qualcomm Enter Bidding War for UK Chip Designer Alphawave

Arm and Qualcomm have reportedly held discussions about acquiring the U.K.-based semiconductor company Alphawave. | Credit: Anadolu / Getty Images. In recent days, leading semiconductor firms Arm and Qualcomm have both expressed an interest in acquiring Alphawave. With two of the world's largest semiconductor companies circling, speculation about a potential buyout boosted Alphawave's share price by around 40% on Tuesday, March 1. Semiconductor Giants Eye Alphawave With its diverse portfolio of intellectual property (IP) for applications spanning data centers, telecommunications and AI, Alphawave would be a valuable asset for either Arm or Qualcomm. Both companies are major semiconductor designers and compete in several markets. According to sources cited by Reuters , Arm discussed a potential takeover with Alphawave but ultimately decided not to pursue the deal. The SoftBank-owned company was reportedly most interested in Alphawave's SerDes (serializer-deserializer) IP. Even if Arm doesn't make a move, Alphawave's technology remains in high demand. SerDes in High Demand A key technology that determines how fast information can move between chips, Arm's current lack of SerDes IP is a weakness for the company as it looks to grow its AI processor business. Meanwhile, although Qualcomm does have its own SerDes capabilities, it lags behind industry rival Broadcom. In a sign that the firm is looking to bolster its capacity to deliver high-speed AI infrastructure solutions, Qualcomm recently posted a job listing for an engineer to help test and deploy SerDes IP, Alphawave's area of expertise. Qualcomm's AI Spending Spree Qualcomm's interest in Alphawave follows two recent acquisitions aimed at expanding the company's AI capabilities. On Tuesday, April 2, the firm announced that it had acquired VinAI's generative AI unit, MovianAI. The Vietnamese AI lab is known for its computer vision and natural language processing prowess, which Qualcomm said it plans to combine with its own research and development capabilities. In another recent AI deal, Qualcomm has also reached an agreement to acquire Edge Impulse, a California AI startup focused on optimizing AI models for edge hardware.

Exclusive-Arm recently sought to acquire Alphawave for AI chip tech, sources say

NEW YORK/SAN FRANCISCO/LONDON (Reuters) - SoftBank-owned chip tech provider Arm Holdings recently sought to acquire Alphawave, a UK-based supplier of semiconductor intellectual property, to secure a crucial technology that is crucial for building its own artificial-intelligence processors, according to three sources familiar with the matter. Alphawave, which has a market value of 707.1 million pounds ($913.36 million), has been working with its investment bankers to explore a sale after receiving acquisition interest from Arm and other potential acquirers, one of the sources told Reuters. Arm, however, has decided not to pursue a takeover of Alphawave after its initial discussions with the company, two of the sources said. Arm approached Alphawave recently with the aim of acquiring its technology that determines how fast information can get onto and off a chip, which is crucial for AI because chatbots such as ChatGPT and other applications can require thousands of chips strung together at once to operate smoothly. Known as "serdes" - short for serializer-deserializer - the tech is one of the competitive advantages Broadcom boasts, which has helped it win AI chip customers such as Alphabet's Google and OpenAI. SoftBank and Arm declined to comment. Alphawave declined to comment. Alphawave has a joint venture in China called WiseWave that it operates with the Chinese investment firm Wise Road Capital, which American officials placed on a U.S. blacklist due to national security concerns last year. Arm's ties to China served to complicate its public listing in 2023, Reuters reported at the time. BIG BET ON SERDES UK-headquartered Arm, which is 90% owned by Japan's SoftBank Group, does not make chips itself but sells the fundamental building blocks and other intellectual property. It generates revenue by billing companies for a license to use its tech and collects royalty payments for each chip sold. Through a range of tactics Arm has sought to improve its profit margin and expand revenue. These include exploring the idea of designing and selling a chip of its own, signaling a departure from its business of licensing intellectual property to other chip design firms and the possibility of competing directly with Arm's customers. Executives disclosed specifics about the company's fresh approach to its future plans during a December trial in a civil lawsuit over a contract with Qualcomm. The plans disclosed during the trial included internal messages and documents that discussed the introduction of its own chip, though Chief Executive Rene Haas downplayed the comments. He said they reflected long-term strategic spitballing, in which executives often engage. In addition to the details revealed during the trial, Arm has also made a recruiting effort to identify and hire talent capable of launching a chip designed by the company, Reuters reported in February. Arm does not have SerDes technology - short for serializer/deserializer, which converts parallel data to serial data and vice versa for high-speed communication - as advanced as what Alphawave has built. Though little known, this technology serves as the foundation for Broadcom and Marvell Technology's multibillion-dollar bespoke chip businesses, a market projected to grow to as much as $60 billion by 2028, according to a recent Bernstein report from Mark Li. Nvidia has also developed SerDes technology and has indicated it is willing to license it to other companies as part of the custom chip business it launched. Building powerful SerDes technology is crucial to making an AI chip that could stand out from rivals. Building SerDes from scratch requires a specific set of expertise and roughly two years to create, according to chip industry insiders. (Reporting by Max A. Cherney in San Francisco, Amy-Jo Crowley in London and Milana Vinn in New York; Editing by Matthew Lewis)

Arm recently tried to buy Alphawave to strengthen its position in AI

Aiming to improve its AI chip segment, Arm seems to be looking for potential acquisitions in the field. According to Reuters sources, the company has approached Alphawave - unsuccessfully, as it stands. Arm Holdings, the British chip technology provider majority-owned by Japanese group SoftBank, recently approached semiconductor IP specialist Alphawave with a view to acquiring it, according to three sources close to the matter. The move was aimed at getting its hands on technology essential to the development of its own artificial intelligence processors. One of the sources told Reuters that Alphawave had begun strategic discussions with its investment banks about a possible divestment, after attracting interest from Arm and other potential buyers. However, according to two other sources, Arm decided not to pursue discussions after these initial exchanges. The target of this attempt was a technology called serdes, a contraction of serializer-deserializer, which optimizes the speed at which data transits to and from a chip. This component is all the more crucial in the context of AI, where thousands of chips need to operate in a coordinated fashion, as is the case with ChatGPT chatbots. SerDes technology represents a significant competitive advantage for Broadcom, which has used it as a lever to win over customers such as Google (Alphabet) and OpenAI. Marvell Technology and Nvidia have also invested in this strategic niche, the latter even mentioning its desire to license its own SerDes as part of its new custom chip design business. Following the release of these revelations, Alphawave's share price jumped 21%, recording its biggest gain since September 2021. The stock closed at 93.5 pence on Monday, valuing the company at around £707m, or almost $914m. Alphawave is also involved in a joint venture in China, WiseWave, with investment company Wise Road Capital, which has been blacklisted by US authorities due to national security concerns. Arm's ties with China had already complicated its IPO in 2023, as Reuters reported at the time. Based in the UK, Arm, which is 90%-owned by SoftBank, does not manufacture chips as such: instead, it sells the fundamental technological building blocks, licenses and intellectual property to other designers. Revenues are generated both through licenses and royalties on each chip sold. To boost its profitability, Arm is exploring various levers, including the possibility of designing and marketing its own chips, a move that would mark a strategic departure from its traditional model, and could potentially put it in competition with its current customers. Evidence uncovered in a civil lawsuit against Qualcomm last December revealed internal discussions about these plans. However, CEO René Haas put these ambitions into perspective, describing them as mere long-term strategic speculation. At the same time, Arm has stepped up its recruitment efforts to build a team that is capable of carrying out this new in-house chip project, according to a Reuters survey published in February. SerDes technology therefore appears to be a missing piece for Arm, which currently lacks a level of expertise as advanced as that of Alphawave. According to industry experts, developing such a technology in-house would require around two years' work and very specific skills, an investment in time and resources that the company now seems to be weighing up carefully. According to Bernstein, the market for customized chips could reach up to $60bn by 2028. Furthermore, ARM aims to end 2025 with a 50% share of the global AI market, compared with just 15% today.