SoftBank To Scoop Up Semiconductor Company ARM In $32 Billion IoT Deal

SoftBank on Monday said it plans to acquire mobile semiconductor design company ARM Holdings in an all-cash transaction valued at $32 billion as it aims to become a leader in the Internet of Things.

SoftBank Chairman and CEO Masayoshi Son said in a presentation that his company was drawn to ARM due to its unique foundational technology and its growth potential in the IoT market.

’[SoftBank] intends to sustain ARM’s long-term focus on generating more value per device, and driving licensing wins and future royalty streams in new growth categories, specifically ’Enterprise and Embedded Intelligence,'’ SoftBank said in a statement.

[Related: The 10 Coolest IoT Products Of 2016 (So Far)]

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SoftBank, a computer software company, first broke into the mobile phone industry in 2006 by acquiring Vodafone's Japanese unit for $15 billion and digging deeper into telecommunications.

Meanwhile, Cambridge, U.K.-based ARM got a head start in the mobile segment, unlike competitors like Intel, and its chip designs are in most smartphones, tablets and mobile devices across the world. The company gets royalties when mobile vendors like Apple, Samsung and Qualcomm adopt its designs.

However, the company has also been betting large on the Internet of Things as it devises chips that use less power so they can be used in smaller gadgets or devices that are needed in IoT. This comes as the smartphone market begins to slow down. Smartphone vendors are struggling as the market becomes more saturated, according to IDC, which reported that the worldwide smartphone market growth was flat in the first quarter of 2016.

In the past year alone, ARM has invested millions of dollars in IoT-related chip designs and acquisitions, including Sunrise Micro Devices and Wicentric.

ARM’s Cortex-R and Cortex-M designs present opportunities in the smart automotive industry in particular, and its TrustZone technology is essential for IoT device security, SoftBank said.

The deal, one of the biggest so far this year, is the first major cross-border transaction in the U.K. since last month's Brexit vote to pull the country out of the European Union.