[Asia Economy Reporter Kim Suhwan] Reports have emerged that the UK government may block the acquisition of the British semiconductor company ARM Holdings by the US graphics processing unit (GPU) manufacturer Nvidia.
On the 3rd (local time), Bloomberg News, citing sources familiar with the matter, reported that "the UK government is considering blocking Nvidia's acquisition of ARM due to national security concerns."
Previously, Nvidia, the largest US semiconductor company by market capitalization and the world's largest GPU manufacturer, announced in September last year that it would acquire the UK-based ARM for $40 billion.
ARM is a company that virtually monopolizes the design of central processing units (CPUs) used in mobile devices such as smartphones. If Nvidia, a leader in the graphics semiconductor field, acquires ARM, Nvidia could become the world's largest semiconductor design company, dominating competitors in both GPU and CPU sectors.
In April, UK regulatory authorities officially began reviewing Nvidia's merger plan and reportedly released a confidential report at the end of last month.
Bloomberg News, citing sources, reported that the report revealed the UK government raised national security concerns.
In fact, ARM designs semiconductors not only for mobile devices but also for servers used by major corporations and government agencies.
Previously, the UK government declared that it considers its semiconductor industry as critical infrastructure and has pledged to prioritize policies protecting the semiconductor sector.
Currently, UK regulators are investigating the acquisition plan of the UK semiconductor company Newport Wafer Fab (NWF) by Chinese capital, citing potential national security issues.
According to sources, the UK government plans to conduct an in-depth investigation into Nvidia's acquisition of ARM as well, and no final decision has been made yet.
In fact, if the UK government blocks Nvidia's acquisition plan, analysts say it would cause a significant setback to Nvidia's plan to dominate the mobile semiconductor market.
Anand Srinivasan, a semiconductor industry analyst, said, "If the UK blocks the merger, it will further reduce Nvidia's chances of dominating the computer chip market," adding, "Investors initially had low expectations that this merger would be completed."
Following the report, Nvidia's shares fell by up to about 2% during the trading session on the US stock market.
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