Nvidia and SoftBank are each winners in a $ 40 billion deal for Arm Holdings

Nvidia Corp. Co Arm Holdings’ imminent sale at $ 40 billion could have broader implications for the global semiconductor industry, upgrading one of its highest fliers and opening another large stake by SoftBank Group Corp.

The Japanese technology group said late Sunday that it had reached a deal to sell Nvidia for a mix of cash and stock, confirming a report by The Wall Street Journal on Saturday. Nvidia nvda,
Will pay $ 21.5 billion in stock and $ 12 billion in cash. Softbank 9984,
+ 9.47%
One can also get up to $ 5 billion in cash or stock to meet the arm-financial-performance target. Nvidia Arm will issue $ 1.5 billion in stock to employees.

Nvidia, which makes graphics processors, and ARM, which designs microprocessors that power most of the world’s smartphones, may not be household names, but they are some of the biggest players in the chip industry. One union will immediately pick up Nvidia, whose stock this year is one of the market’s best performers, a major force in the market for smartphones and a large supplier of technology for many other devices, from smart speakers to fitness trackers.

The deal, which is the largest semiconductor takeover ever, marks a victory for SoftBank and its chief executive, Masayoshi Son, who bought Arm four years ago for $ 32 billion and struggled to start growing the business Was.

For Nvidia’s chief executive Jensen Huang, this is the biggest gamble since he helped co-founder the chipmaker in 1993. Nvidia is a rapidly emerging industry player, known for making graphics chips that power video like the wildly popular Nintendo Switch. Chips have been in hot demand during the epidemic as lockdowns keep people at home.

An expanded version of this report appears on WSJ.com.

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