SoftBank's Arm Holdings (ARM, Financial) recently considered acquiring UK-based semiconductor IP supplier Alphawave to enhance its AI processor capabilities. Arm showed interest in Alphawave's SerDes technology, essential for AI applications requiring rapid data transfer between chips, such as those in systems like ChatGPT. Despite initial talks, Arm decided not to pursue the acquisition further.
Alphawave's shares spiked by 21% due to the news, before settling at a 15.08% increase, valuing the company at approximately £819 million ($1.04 billion). The strategic importance of SerDes technology is underscored by its use in AI chip production, a field where companies like Broadcom (AVGO) and NVIDIA (NVDA) have established a competitive edge.
Arm, which primarily licenses chip designs, aims to boost its profitability by exploring new strategies, including potentially designing its own chips, suggesting a shift towards competing with its customers. Arm's interest in acquiring advanced SerDes technology highlights the company's push to strengthen its position in the growing AI chip market, projected to reach $60 billion by 2028.
