FTC Sues To Block A $40 Billion Acquisition In The Semiconductor Chip Industry
December 23, 2021 at 01:16 am EST
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The FTC filed an administrative complaint against U.S. chip manufacturer Nvidia Corp. and U.K. chip design provider Arm Ltd. and its parent company (collectively "Arm") to stop Nvidia's $40 billion acquisition of Arm over allegations that the acquisition would harm competition and stifle innovation in semiconductor chips in violation of the FTC Act and the Clayton Act.
The complaint alleges that Arm's technology is critical for both Nvidia and its competitors in three worldwide chip-related markets and that the acquisition will give Nvidia the ability to undermine its competitors because the acquisition will provide Nvidia with access to competitive intelligence about other chip manufacturers who are Arm's licensees. The complaint further alleges that the acquisition will stifle innovation because Arm would no longer pursue projects in conflict with Nvidia's interests and would not develop beneficial new technologies that may harm Nvidia's business objectives.
The complaint seeks injunctive relief to stop the acquisition or, in the alternative, structural relief, such as divestiture or reconstitution of assets, among other things.
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Ms Lori Kalani
Cozen O'Connor
1627 I Street, NW
#1100
Washington, DC
20006-4022
UNITED STATES
NVIDIA Corporation is the world leader in the design, development, and marketing of programmable graphics processors. The group also develops associated software. Net sales break down by family of products as follows:
- computing and networking solutions (55.9%): data center platforms and infrastructure, Ethernet interconnect solutions, high-performance computing solutions, platforms and solutions for autonomous and intelligent vehicles, solutions for enterprise artificial intelligence infrastructure, crypto-currency mining processors, embedded computer boards for robotics, teaching, learning and artificial intelligence development, etc.;
- graphics processors (44.1%): for PCs, game consoles, video game streaming platforms, workstations, etc. (GeForce, NVIDIA RTX, Quadro brands, etc.). The group also offers laptops, desktops, gaming computers, computer peripherals (monitors, mice, joysticks, remote controls, etc.), software for visual and virtual computing, platforms for automotive infotainment systems and cloud collaboration platforms.
Net sales break down by industry between data storage (55.6%), gaming (33.6%), professional visualization (5.7%), automotive (3.4%) and other (1.7%).
Net sales are distributed geographically as follows: the United States (30.7%), Taiwan (25.9%), China (21.5%) and other (21.9%).
NVIDIA CORPORATION 
