The Japanese technology investor Softbank Group has failed with the more than 60 billion dollar sale of the British chip design company ARM to the American semiconductor manufacturer Nvidia.

Business newspapers and news agencies unanimously reported on Tuesday, citing unnamed sources.

The sale, which had been announced in 2020, then fell through due to competition law objections from regulators in the United States and Europe.

Patrick Welter

Correspondent for business and politics in Japan based in Tokyo.

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ARM doesn't make its own semiconductors, but has developed the technology used in the chips in Apple and Samsung smartphones and increasingly in other areas of the computing economy.

Due to the failure of the transaction, Nvidia misses the opportunity to gain a competitive advantage over competitors such as Intel or AMD.

Softbank, whose shares have lost more than 45 percent since the high a year ago, has to do without a whopping profit.

According to the reports, the Japanese investor ARM now wants to go public.

Softbank did not comment on the reports when asked.

The company will release its quarterly data later in the day.

In the crossfire of industrial and competition policy

The failed purchase comes at a time when governments in the major industrialized countries are spending a lot of money to push the expansion of the semiconductor industry in their economies.

The European Union wants to present plans for investments in the semiconductor industry totaling 45 billion euros this Tuesday.

United States has announced subsidies of 50 billion dollars.

In a first step, Japan is giving the equivalent of 3 billion euros or around half of the investment sum for the construction of a semiconductor factory for the Taiwanese supplier TSMC in Japan.

Striving for local production of semiconductors and for a secure supply of microchips is one of the reasons why cross-border acquisitions by semiconductor companies are currently viewed more critically than usual. In Germany, the takeover of Siltronic by Taiwan's Globalwafers failed last week because the Federal Ministry of Economics had not completed the financial security check in time.

Similar concerns have also arisen in the UK regarding the sale of ARM to Nvidia.

This industrial policy issue is mixed with competition policy concerns, which are the subject of investigations in the UK and the US.

Many of the major chip manufacturers use ARM licenses and have further developed their chip designs based on ARM.

Companies such as Qualcomm and Microsoft had raised concerns about the merger because they fear that Nvidia could gain unfair competitive advantages if it bought ARM.

Softbank bought ARM in 2016 for $32 billion and described it as the core of Softbank's future business.

But in 2020, Softbank founder Masayoshi Son sold ARM to Nvidia for around $38.5 billion.

Nvidia wanted to pay part of the purchase price with its own shares.

Because the share price of the American chip and graphics card specialist has risen rapidly since then, the value of the transaction last year was at times 80 billion dollars and more.

Most recently it was more than 60 billion dollars.

According to a report in the British newspaper "Financial Times", Nvidia decided on Monday American time to give up the acquisition.

Softbank received a fee of $1.25 billion as compensation.