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July 18, 2016updated 21 Oct 2016 4:29pm

Why did Softbank buy ARM?

The Softbank CEO Masayoshi Son explains why he’s spending £24bn on the UK chip outfit. What are the prospects for the company as a private entity?

By Sam

In a press conference in London today Softbank Group CEO said that by taking ARM private the firm will not have to worry about quarterly revenue and profit and that he hoped the firm would invest more heavily in R&D.

“Now is the time to increase the number of engineers. so  that’s where investments should go, into the smartest engineers into designers of chips. We’ll encourage that as the best investment. {ARM don’t own the foundry, it is a designer not a manufacturer of microprocessosrs.]

He said investment in chipsets for IOT would be especially encouraged  but also pointed to the opportunities at the high end processor market and said he expected continued investment in server side chips.

He said the opportunities are in areas such as automobile. As cars become smarter and smarter with more chips inside them, especially driverless cars will become supercomputers with an integrated bunch of chips.

He said at the server side “we as a group have servers in cloud. The biggest cost of operating chips and servers in cloud is electricity. The strength of ARM is low power consumption. This will decrease the cost of operating data centre with ARM servers by a lot.

Mr Son said that he expected ARM customers such as Apple, Qualcomm and Samsung to be excited about the deal and that as he was good friends with all the relevant CEOs including Tim Cook of Apple he expected it to be warmly received.

Softbank does not have a big processor business and not is it a big user of mobile or server microprocessors so there is not conflict of interest at any level with ARM’s existing customer base he said.

As well as focusing and more investment in engineering and engineers for the beginning of the next horizon of IOT and connected vehicles he said Softbank and ARM together could expect to see ARM grow its services arm in areas such as mobile security and mobile internet. ‘I don’t know the model but it is great opportunity.

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Mr Son is travelling to Cambridge today to speak with ARM’s senior management.

“This afternoon I will talk to senior management. For many this is a big surprise. I will communicate my passion and commitment. And I believe we have same vision for future of technology and hope they will continues to put their life and passion into the future of the company.

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