Chip designer Arm recently sought to acquire London-listed semiconductor IP supplier Alphawave, according to reports.
Cambridge-based Arm, part-owned by Japanese conglomerate SoftBank, entered initial discussions with Alphawave in efforts to secure technology required to build AI processors, first reported by Reuters.
Arm has not decided to progress with an acquisition according to sources close to the situation.
With a market cap of $1.1bn, an acquisition of Alphawave would be an expensive gamble, even for the UK’s most valuable tech firm – worth more than $100bn.
Arm designs and licenses the architecture required for semiconductor firms to develop new chips. The company has recently been exploring designing its own chips, in a move that would put it in competition with its customers.
The plans were revealed during a civil lawsuit between Arm and US firm Qualcomm and were initially dismissed as a long-term hypothetical strategy by CEO Rene Haas.
Were Arm to acquire Alphawave, it would have access to its serialzer-deserializer technology, an essential component of AI processor chips.
Shares in Alphawave rocketed 16% on Tuesday, reaching £1.09.
In January, Alphawave reported a record quarter, pulling in £151.6m in bookings for the last three months of 2024.
President and CEO Tony Pialis said at the time that 2025 is “the year we will complete our transition to a semiconductor product company and start generating significant silicon revenue”.
SoftBank, Arm and Alphawave declined to comment.
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