UK Orders National Security Review on Nvidia's Acquisition of ARM

Importance of Semiconductor Industry Highlighted Amid Semiconductor Shortage
UK Government Concerned About Unfair Gains Being Passed to US Nvidia

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The acquisition of the British semiconductor design company ARM by the American semiconductor firm Nvidia has hit a roadblock. The UK government has ordered an investigation into the national security implications of Nvidia's $40 billion (approximately 44.6 trillion KRW) acquisition of ARM.

According to CNBC on the 19th (local time), Oliver Dowden, the UK Secretary of State for Digital, Culture, Media and Sport, instructed the UK's antitrust authorities to investigate the national security impact of the acquisition.

On the same day, Secretary Dowden stated in a press release, "We want to support the prosperity of the UK technology industry and welcome foreign investment, but in cases like this transaction, we cannot ignore the national security implications."

Following the directive, the UK's antitrust authority, the Competition and Markets Authority (CMA), must evaluate the national security impact of Nvidia's acquisition of ARM and submit a report by July 30. The CMA is also investigating potential antitrust violations.

Afterwards, Secretary Dowden may approve or reject the acquisition upon review, or possibly order further investigations.

Amid a global semiconductor shortage that has highlighted the importance of the semiconductor industry, the UK government's antitrust investigation has drawn attention to its underlying reasons.

Regarding this, the UK government is reportedly concerned that the acquisition might unfairly benefit the American company Nvidia, according to The Wall Street Journal (WSJ).

Meanwhile, Nvidia's acquisition of ARM has attracted attention as a merger of the world's largest semiconductor design companies. Nvidia is one of the world's largest graphic chip design companies, and ARM's technology is applied in over 95% of smartphones worldwide.