Ampere, the Oracle-backed semiconductor designer, is open to a takeover by Arm, Bloomberg news agency reports, based on anonymous sources.
Bloomberg News reported at the time that Ampere, which designs semiconductors using Arm’s technology, was valued at $8 billion in a proposed minority investment by Japan’s SoftBank in 2021. It is not known what valuation SoftBank, Arm, and Ampere are currently discussing.
Representatives of Arm and Ampere declined to comment. Spokesmen for SoftBank and Oracle did not immediately respond to requests for comment.
Ampere pushed for acquisition
Ampere is working with a financial advisor to explore acquisition interest. This was reported by Bloomberg in September. The company expressed interest in a deal with a larger player in the industry. It suggests that it did not see an easy path to an IPO.
A deal for Ampere would add to a wave of chip companies looking to capitalize on the AI spending boom. Oracle said last year that it owns 29% of the startup and may exercise future investment options to give it control of the chipmaker.
Competitive market
Although Ampere could benefit from the ongoing AI hype, the market has become more competitive. Several large technology companies are rushing to develop the same types of chips that Ampere makes. While there is much interest in controlling key components as the data center industry refocuses on the AI era, Ampere, like larger competitors Intel and Advanced Micro Devices, must respond to a shift in spending from central processing units (CPUs) to Nvidia Corp.’s accelerator chips.
Ampere makes processors for data center equipment using Arm’s technology. Arm is increasingly moving from a licensor of fundamental standards and basic designs to a more complete chipmaker. Adding Ampere’s engineers, many of whom worked for Intel’s former market-leading server chip division, could add expertise and momentum to CEO Rene Haas’ push into that market.
IPO considered
Ampere founder and CEO Renee James, a former Intel executive, had considered taking Ampere public. In April 2022, the company said it had confidentially filed for an initial public offering (IPO) in the US, at a time when demand for chips was rising rapidly.
A sale of Ampere would continue its series of semiconductor deals. Global deals with chip companies more than doubled to more than $31 billion last year, according to Bloomberg data.