SoftBank Advances Negotiations to Acquire Ampere for $6.5 Billion
Server and CPU Manufacturer
Ampere Acquisition Negotiated at $6.5 Billion
Valuation Approached $8 Billion in 2021
Japan's SoftBank, led by Chairman Masayoshi Son, is reportedly negotiating the price for the acquisition of Ampere Computing, a U.S. semiconductor design company, according to Bloomberg News.
On the 5th (local time), Bloomberg cited sources familiar with the matter, stating that SoftBank is discussing Ampere's acquisition price at around $6.5 billion, including debt. The sources said the deal could be announced within weeks, but negotiations are ongoing and there is a possibility of delay or cancellation.
Ampere was founded in 2017 by Rene James, a former Intel executive. Oracle, a U.S. software company, holds a 29% stake and Ampere specializes in designing central processing units (CPUs) for servers and data centers. The structure involves the British semiconductor design firm ARM creating the basic blueprint, upon which Ampere designs the CPUs. These CPUs are mainly used by Oracle and Google. Oracle has stated that it may exercise an investment option to take control of Ampere in the future.
Ampere focuses on producing chips with higher strategic efficiency than Intel and AMD. Their strategy is to differentiate themselves by offering chips that consume as little power as possible.
Ampere initially pursued an initial public offering (IPO). In April 2022, during a period of surging semiconductor demand, Ampere applied for an IPO on the New York Stock Exchange but was unsuccessful. After the IPO failure, ARM proposed an acquisition during the process of exploring next steps. ARM is 90% owned by SoftBank.
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In 2021, SoftBank had proposed a minority stake investment in Ampere, at which time Ampere was valued at about $8 billion. If SoftBank succeeds in acquiring Ampere, it would effectively control both ARM, which holds key semiconductor design assets, and Ampere, which manufactures chips based on ARM technology. This acquisition is interpreted as SoftBank's move to gain an advantage in the AI inference and strategy chip market, anticipating fierce competition in the AI-related chip market going forward.
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