News Report: TSMC, Foxconn Among Potential Arm Buyers

Chung Leong

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An acquisition by TSMC seems like a complete non-starter. Little chance of winning regulatory approval in South Korea. Foxconn, meanwhile, doesn't bring much to the table in terms of synergy.
 

HyperMatrix

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An acquisition by TSMC seems like a complete non-starter. Little chance of winning regulatory approval in South Korea. Foxconn, meanwhile, doesn't bring much to the table in terms of synergy.
Why would they need regulatory approval from South Korea? Arm is British. TSMC is Taiwanese. And SoftBank is Japanese.
 

watzupken

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TSMC is definitely the best choice here, as compared to the likes of Apple, Nvidia, etc. There may still be some potential issue where TSMC may have an unfair advantage other foundry businesses if they own ARM.
 

Chung Leong

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Why would they need regulatory approval from South Korea? Arm is British. TSMC is Taiwanese. And SoftBank is Japanese.
Seriously, I don't where people get this idea that foreign ownership grants immunity from local laws. Anyone who reads the news knows this isn't true. It wasn't long ago when China torpedoed Qualcomm's attempt to buy NXP. If the Chinese feel like it, they can torpedo this deal too.
 
Apr 10, 2020
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Let's shut ARM down and see what will happen.

Or even better, SoftBank should start learn from SCO and start charging Qualcomm and Apple billions. This will be interesting how Mac will switch immediately back to x86.
 

HyperMatrix

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Seriously, I don't where people get this idea that foreign ownership grants immunity from local laws. Anyone who reads the news knows this isn't true. It wasn't long ago when China torpedoed Qualcomm's attempt to buy NXP. If the Chinese feel like it, they can torpedo this deal too.
I asked a question, which was why they would need regulatory approval from South Korea? You made some obscure comment about local laws. Ok let's say South Korea creates a domestic law in their country that says "We, South Korea, will not allow a British company to sell its assets to a Taiwanese company." Why would those companies, and those countries, have any reason at all to care what South Korea says about this matter?

Regarding your Qualcomm/NXP comments, this is what I found:

"China didn't outright block Qualcomm from acquiring NXP. But the two had set today as a deadline for the merger—and they needed approval from Chinese antitrust authorities, since each company does significant business in China. "

So China threatened to cut off NXP/Qualcomm from doing business in China, and un-informally killed the merger. However, ARM has much broader reach, as does TSMC. And if South Korea were to block them from operating in their country, they would have to shut down their own chip manufacturing, including Samsung's Exynos chips which also run on IP from ARM.
 
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Chung Leong

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I asked a question, which was why they would need regulatory approval from South Korea?
Well, you pretty much answered your own question. TSMC does significant business in South Korea and needs to operate in accordance with South Korean anti-trust laws. A company can't go rogue and pursue a deal despite objections of regulators. It's not a question of what retributive measures the country can mend out. The scenario is impossible since no investment bank would want anything to do with it.
 

HyperMatrix

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Well, you pretty much answered your own question. TSMC does significant business in South Korea and needs to operate in accordance with South Korean anti-trust laws. A company can't go rogue and pursue a deal despite objections of regulators. It's not a question of what retributive measures the country can mend out. The scenario is impossible since no investment bank would want anything to do with it.
If TSMC and ARM were one and the same, South Korea couldn’t afford to stop doing business with it. It would have to shut down its own fabs. It comes down to who can apply the most pressure. And South Korea is in absolutely no position to stop doing business with the worlds largest fab, for example, because that would mean it’d have to ban the sales of most electronic devices, including android, Apple, Microsoft, Nvidia, AMD, etc etc. and it would also have to stop its own companies like Samsung which have their own fab, but are using ARM licenses in their chips.

South Korea is far too insignificant to be able to prevent TSMC from acquiring ARM, and it’d only shoot itself in the foot, especially since their own tech export businesses rely heavily on both TSMC and ARM to stay competitive globally.
 

Chung Leong

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If TSMC and ARM were one and the same, South Korea couldn’t afford to stop doing business with it.
The South Korean government could confiscate licensing payments from South Korean companies. It could freeze all assets owned by TSMC within its jurisdiction. Of course, we're talking about an entirely hypothetical scenario here. If South Korean regulators object, the deal dies. No reputable bank would finance a rogue operation. Softbank itself would walk away, pocketing the billion-plus break-up fee, and find a new buyer.

If TSMC were an American company, the situation would be different. The US government is rather capable of changing minds through less-than-gentle means of persuasion. Taiwan, on the other hand, has literally zero political clout in the international arena. It can't even get others to recognize it as a country.
 

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