
ARM founder says Softbank deal is 'sad day' for UK tech - mbgaxyz
http://www.bbc.com/news/business-36827769
======
cm3
And in Germany minister Gabriel is trying to find a European buyer, while the
Chinese Midea makes offers to buy Kuka Robotics. Somehow I have the feeling
that the minister doesn't realize that Midea already owns 76% of Kuka's
shares.

In a global economy, is it really a risk for already global companies to be
owned by someone who isn't in said company's original HQ nation? What
difference does it make, given that the whole operation is already distributed
over the globe?

[http://www.bloomberg.com/news/articles/2016-06-02/midea-
tout...](http://www.bloomberg.com/news/articles/2016-06-02/midea-touts-kuka-
robot-maker-deal-as-offer-hits-german-barrier-ioxs71nb)

[http://www.reuters.com/article/us-kuka-midea-group-stake-
idU...](http://www.reuters.com/article/us-kuka-midea-group-stake-
idUSKCN0ZV0Z4)

~~~
thesimon
>What difference does it make, given that the whole operation is already
distributed over the globe?

It limits your potential job offers after your career as a politician.

~~~
blastrat
foreigners are much more likely to hire people with local influence!

~~~
Gravityloss
Indeed. IIRC Russians hired Gerhard Schröder for gas pipe pr...

------
grabcocque
Probably should have thought of that before he ran ARM into the ground the
first time and sought foreign bailouts.

Under his leadership, "sad days" included sizable foreign investments from
Olivetti, Apple and GEC.

~~~
neximo64
In each of those not entirely relinquishing control.

~~~
ClashTheBunny
How so if the company can be bought today without his consent?

~~~
mijoharas
I don't think he's been involved in the company for more than a decade[0].

[0]
[https://en.wikipedia.org/wiki/Hermann_Hauser](https://en.wikipedia.org/wiki/Hermann_Hauser)

------
sohkamyung
Isn't it a bit of a stretch for Hermann Houser to say ARM 'sold' 15 billion
chips last year and compares ARM to Intel? Technically it was ARM licensees
that sold those chips, not ARM.

Quote from the article: "The man [Hermann Hauser] who helped spin ARM Holdings
out from Acorn Computers in 1990 also said the technology firm had sold 15
billion microchips in 2015, which was more than US rival Intel had sold in its
history."

~~~
duhast
ARM has not sold a single chip in 2015 but 200+ partner companies that
integrate ARM into theirs SoC together with quite sophisticated tech like
modems, GPU's, accelerators of any kind etc. In many cases real estate taken
by ARM is below 1/4 of total die area.

~~~
amelius
> real estate taken by ARM is below 1/4 of total die area

Yes, but perhaps it is the most valuable area of the die? The rest may be, for
instance, taken by highly repetitive memory cells?

~~~
chongli
Most valuable? I doubt it. Each of these partners shipping major chip volumes
have likely ran a cost/benefit analysis of an in-house CPU vs paying the
licensing fee.

Here's a more sobering set of numbers to compare ARM and Intel on:

Intel Corporation _net income_ (2015): $11.4 billion [1]

ARM Holdings plc 2015 total assets (2016): $3.21 billion [2]

[1] [https://en.wikipedia.org/wiki/Intel](https://en.wikipedia.org/wiki/Intel)

[2]
[https://en.wikipedia.org/wiki/ARM_Holdings](https://en.wikipedia.org/wiki/ARM_Holdings)

~~~
lostlogin
Intel is in a problematic situation though and is laying off 12,000 staff st
the moment. I don't think the dollars tell the full story.

------
Nux
Now that they got their country back, they can sell it off. :-)

Probably the lower value of the £ has probably contributed to this, or
hastened it.

~~~
grabcocque
Turns out one of the largest corporate acquisitions in UK corporate history
probably took more than a fortnight to put together.

But a weaker pound certainly makes the UK are more attractive target for
investment.

~~~
rmc
> _But a weaker pound certainly makes the UK are more attractive target for
> investment._

If only the UK wasn't going to leave the largest free trade group!

------
ProfChronos
Interesting timing: we have the same debate rising up in France with the
acquisition of Medtech (Rosa medical robots) by Zimmer Biomet [1]. CEO and
founder, Bertin Nahum, said he had to sell as he couldn't find the right
funding in FR/EU. Real shame and also a sad day for France (med)tech

[1][http://www.reuters.com/article/idUSFWN1A40EO](http://www.reuters.com/article/idUSFWN1A40EO)

~~~
demonshalo
It's simple. Europe has no money. The middle class has no savings and the
investment sector is far too regulated, confined and incapable of looking at a
multi-year timescale.

~~~
toyg
The investment sector is simply too conservative, for historical and cultural
reasons. Regulation is mostly an excuse, a fig leaf for a spiritually-bankrupt
upper class.

~~~
Brakenshire
The English Upper Class does have a long and storied tradition of rent-
seeking. If you can extract so much value out of something like housing, it's
difficult to see why you would get involved in anything risky and technical.

~~~
roel_v
Why is real estate investing 'rent-seeking' and buying a tech company an
'investment'?

~~~
pjc50
The tech company wins or loses based on innovation (unless it goes the
monopoly route, in which case it's back to rent-seeking).

Real estate is scarce, inherently exclusive by location, and limited in supply
by planning law. The amount of money returned by real estate is totally out of
proportion to the work involved in its maintenance.

~~~
DominikR
> The amount of money returned by real estate is totally out of proportion to
> the work involved in its maintenance.

And what is the work involved in building a housing unit? If you build one in
most of the EU capitals today you can expect to get your investment back after
30-40 years if you rent it out. (that's why most just sell the housing unit)

Would you make an investment in a company expecting to get your investment
back after 30 years? I certainly wouldn't because I want to make profit while
I'm still alive.

If housing units would grow like trees without human interaction then you'd be
right, but each one of them had to be built in the first place.

~~~
pjc50
The returns aren't in the rent, they're in the capital gains. More gains than
the stockmarket. This is why people are _buying_ the units, especially from
overseas. Sometimes they're even left unlet.

~~~
skewart
FYI, the vast majority of rental real estate is owned by investment firms who
buy and sell entire buildings, not people buying units.

In general capital gains in an otherwise depreciating asset are tied to
outsized increases in the revenue stream that asset produces. To put it
another way, the increase in value is fundamentally driven by an increase in
the number of people who want to use the building or the neighborhood - it's
driven by a real utilitarian value that the asset does provide, or has the
potential to provide for people.

If you think that real estate always goes up in value (above inflation) I
would wager you've spent most of your life in the big cities where an
increasing number of people want to live. I also have some lovely properties
in Buffalo and Detroit that you might be interested in.

Of course, sometimes, in a frothy market, both professional firms and random
individuals speculate on real estate, looking for capital gains disconnected
from any underlying fundamental increase in utilitarian value. There are
plenty of half-finished subdivisions in rural Florida that show how real this
phenomenon is. However, it's an aberration, and it's fundamentally unstable so
it doesn't tend to last for long.

Drawing conclusions about real estate markets in general from speculative
bubble conditions is similar to drawing conclusions about technology companies
from day trading on the Nasdaq in 1999.

------
dandare
The sum almost feels low in the light of all the unicorn valuations.

~~~
abraae
And in light of MS paying $26M for a post-peak social network.

~~~
duncans
$26bn

~~~
blowski
Just to make the comparison more obvious, ARM is being sold for £24 billion
(GBP) which is about $31.5 billion (USD).

------
petercooper
A complaint I've seen about the UK's tech scene is that it can't be like
Silicon Valley because there haven't been enough acquisitions to spread the
wealth and encourage further and more diverse investment. But now there's an
acquisition, people are moaning :-D

~~~
amelius
That may be because the wealth is spreading elsewhere ...

------
imtringued
I would like to see some ARM chips that are competitive with x86 even if that
still means they are only put in Chromebooks. The Tegra X1 is quite
interesting but the dev board is too expensive for me ($599). It's kind of
ironic that AMD's x86 cpus are actually the cheapest choice if you want
relatively high performance because that is one of the big selling points of
ARM.

~~~
mijoharas
> It's kind of ironic that AMD's x86 cpus are actually the cheapest choice if
> you want relatively high performance because that is one of the big selling
> points of ARM.

I'd disagree that that's the selling point. I'd say ARM's selling points have
always been low cost and power efficiency. They have recently started trying
to make inroads into the higher performance server market (with their selling
point still being power efficiency), but their main market is SOCs.

That said, I'd also like to see ARM developing some higher powered chips at a
lower price point, it'll be interesting to see how much they start to move
into that market.

~~~
honkhonkpants
I think you meant low cost and low power, not power efficiency. In terms of
computation performed per joule used, ARM isn't any better than x86, and is
much worse on many workloads. They design their parts at a low power point,
but they aren't terribly efficient.

~~~
mijoharas
Thanks, I had thought it was power efficiency, but this seems to have been the
case historically, and currently only seems to apply to microcontrollers[0]
(note, this is a cursory reading of a single article, please let me know if
there is other information). I should probably update my information into the
21st century. :)

[0] [http://www.extremetech.com/extreme/188396-the-final-isa-
show...](http://www.extremetech.com/extreme/188396-the-final-isa-showdown-is-
arm-x86-or-mips-intrinsically-more-power-efficient/3)

------
tiatia
Why a sad day? The UK has lost most of it's industrial base and the oil, that
fueled the rise of the UK under Thatcher, runs out. Last thing I heard is that
they want to make a free trade zone with China. So they wouldn't really need
whats left of the industrial base anyway.

Probably they are trying to become an offshore business center with decent
money laundering services.

------
ed_blackburn
Can anyone express in none emotional terms what the sale means to UK business?

~~~
edent
The UK has seen several large / important companies being taken over in recent
years. In nearly all cases it has lead to a reduction in investment, value
being extracted from the business and taken overseas, lowered quality, job
losses, and - in some cases - the companies collapsing.

In addition, with our currency tanking, there is the speculation that our
national assets are being picked up too cheaply.

~~~
rwmj
How is ARM "our national asset"? It was owned by pension funds and
institutions, both at home and overseas. It's now owned by a different, but
also publicly traded company, which is also owned by pension funds etc etc you
get the idea.

Many people work at ARM, some in Cambridge UK and some abroad. Those people -
some of the smartest people I know - are still around, and even if ARM were to
dramatically collapse under the new management, they would get jobs elsewhere
very quickly. Perhaps they'd join start ups developing RISC-V chips, which
would be a net benefit to everyone.

~~~
edent
> How is ARM "our national asset"?

It is UK based. The profits it makes, and people it employs, have a direct
effect on our national and local budgets.

It attracts high-class talent to the UK, further increasing its national
importance.

The services it creates acts as an excellent advertisement for the UK's
technology industry.

As you point out, many UK pensions schemes are invested in it.

Personally, I'm not entirely comfortable with the phrase "national asset" \-
but that's the common term used.

> if ARM were to dramatically collapse under the new management, they would
> get jobs elsewhere very quickly.

Tell that to those employed by Nokia.

~~~
rwmj
None of this stuff about "national importance" moves me. If ARM was based in
France then people from Cambridge UK would still be able to work there, either
by moving house or remotely. For a company which is purely based on IPR and
software it's completely unnecessary for the networks to be colocated.
(Hardware is of course quite a bit different, but maybe that will change in
future)

FWIW I work, from home in the UK, for a multinational software company which
is largely based in the US.

~~~
pbhjpbhj
> If ARM was based in France then people from Cambridge UK would still be able
> to work there, either by moving house or remotely. //

People may not be able to work in France after Britain leaves the EU so a
company relying on moving those people would be on shaky ground at the moment.

~~~
rwmj
That's merely another reason why Brexit is such a bad idea.

My point is why is ARM a "UK national asset" when if it were located only
about 200 miles away it could be a "French national asset", and really it
would make hardly any difference to anyone. The ownership would be the same
(pension funds etc). The people working for it would be the same. If it does
make a difference at all, that's just because we (humans) make it difficult
for ourselves, not for any real reason.

In fact ARM has several offices in France ([http://www.arm.com/about/company-
profile/locations-around-th...](http://www.arm.com/about/company-
profile/locations-around-the-world.php)). It's only a "UK national asset"
because the company is registered in the UK, for historical reasons. For all I
know there are some employees in France who are so pivotal to ARM as a company
that if they left the thing would collapse. If that hypothetical was true why
wouldn't you call it a French national asset already?

The whole thing of nationalities and borders is based on very minor and
arbitrary distinctions, so any argument that we try to derive based on those
assumptions quickly descends into "ex falso quodlibet".

~~~
IneffablePigeon
It's a UK national asset because it's _not_ located about 200 miles away. I
would certainly apply for a job at ARM in the UK, but I wouldn't in France,
because I don't want to live in France and I don't want to work remotely.

The fact they're in the UK means that a lot of the money they make ends up
here, which means more money in the economy near me and more money for the
government to spend on things that benefit me.

Nationalities and borders may well be arbitrary (I agree), but that doesn't
mean they don't matter.

~~~
rwmj
Sure, you (and I) have a preference to live in the UK and speak English and
drink proper beer and so on. The good news is that a hypothetical ARM company
registered in France wouldn't prevent you from enjoying all that _and_ working
for them, since in this reversed situation ARM has offices in the UK and even
if it didn't you could work remotely.

When you and your friends work remotely from the UK, you pay income tax and
VAT and all the rest. (Corporation tax is both very hard to collect and has
just been reduced, yet again, by the outgoing chancellor)

Now I'll grant that for some software/IP-based companies you cannot work from
where you choose, but those companies are broken. Also you say you don't like
to work remotely, but I think if you worked for a company which was organized
around this (as I do) you really would prefer it, as there is hardly any down-
side.

------
anonbanker
I'd rather have my ARM devices backdoored by another country than my own (as a
FIVE EYES resident). I know this is not a popular choice, but consider the
threat profile: if Japan knows my secrets, are they sharing with Britain or
Canada? Likely not, as the agreement is not in place. ARM was hamstrung for me
and my corporation (Canadian medical marijuana industry) due to its ties to
government. With this sale, that is no longer the case.

If I could, I'd buy 100% Russian and Chinese (especially gonkai'ed) gear, but
that's not feasible yet. Hopefully sooner than later.

------
ionwake
To think 2 weeks ago I was put forward there for an interview, and I just
heard back that they are outsourcing it to a different team...

I can't help but feel this is not coincidental, and that I probably won't be
hearing about any new roles any time soon.

------
matco11
Considering that 1) the revenue base of ARM is predominantly in USD licensing
fees, and 2) that the British pound has lost ~20% against he dollar. The ~41%
premium is really a 21% premium. No chance a global leader like ARM could have
been snatched for a 21% premium a few weeks ago.

Run a list of companies listed in London with predominantly non-GBP revenue
base and you have a great list of takeover targets.

------
fit2rule
I wonder now if Softbank/Japan is going to be brought into the "five-eyes"
agreements somehow, now that they'll have control over all the ARM processors
we'll be using on the planet, and thus will also inherit all the backdoors put
there for that bastion of British Pride, the GCHQ ..

------
kazinator
That's nothing compared to all of 7-Eleven being Japanese owned. Also, Sapporo
owns Canada's Okanagan Springs beer brewery. :)

------
m0llusk
Developing technologies for the future of mankind is not inherently compatible
with Nationalism.

------
petrikapu
Is this all because of brexit or why to sell such successful business?

~~~
glenndebacker
Seeing how the pound has fallen, I think it's cheaper for foreign investors to
buy Britisch companies.

That is a bit ironic if you keep the surge of nationalism in mind.

~~~
grabcocque
Brexit was partly about the EU's sclerotic lack of democracy and partly about
failure to control immigration. Since this touches neither of those, I don't
see the irony.

~~~
Xiol
Except the EU isn't undemocratic and immigration is good the economy.

~~~
mattmanser
Haha, what EU are you talking about?

When did you vote for Juncker or anyone else on the commission? The commission
where all the power of the EU is concentrated?

It's got better than when it was at its worst, but the EU is still incredibly
undemocratic and unaccountable for a Western institution.

And let's not even start on how Germany suddenly seem to be in control of the
Euro and seem to be essentially dictating monetary policy in Greece, Italy and
Spain.

~~~
jankor
Juncker was a leader of the party that won European Parliament elections. The
rest of the commission is appointed by the elected Parliament as well. Let's
compare this to let's say House of Lords.

Germany was the main opponent of lowering the interest rate to 0 and launching
QE, they obviously failed, no Germany is not suddenly in control of the Euro.

I am myself not a big proponent of the EU, but let's keep criticism where it's
due and don't raise conspiracies about sudden german control of the Euro.

~~~
ZenoArrow
> "Let's compare this to let's say House of Lords."

Yes, lets.

For the most part, the role of the House of Lords is to refine the work that
is done by the House of Commons. In other words, they act as an advisory body.
It's the House of Commons that makes the decisions on what laws to propose,
that sets the political direction for the country. The House of Lords proposes
no laws themselves, and aside from exceptional circumstances they cannot block
legislation that is proposed by the House of Commons.

Compare that to the EU. The European Parliament, where the bulk of the elected
representatives sit, cannot propose new laws, they can only refine what gets
proposed by the European Commission. In other words, it's the inverse of the
UK system.

~~~
lispm
[http://www.europarl.europa.eu/aboutparliament/en/20150201PVL...](http://www.europarl.europa.eu/aboutparliament/en/20150201PVL00004/Legislative-
powers)

------
cleeus
aha, they intend to keep the ARM HQ in the UK. Well ... let's see what they
say in 10 years because you know, once a company is sold, the buyer can do
whatever the fuck he wants with the thing he just bought.

~~~
Xiol
See also: Cadbury's.

Fuck you, Kraft.

~~~
volatilitish
It's one thing to shit over the workers Kraft, but to shit over the product is
another (They changed the recipes, sizes, and generally turned the best
chocolate in the world into shitty American chocolate (no offense to
Americans)).

~~~
ollie87
I've lived in the UK my whole life and I think you've got rose-tinted
spectacles. Cadbury chocolate has always been terrible.

~~~
ionwake
If you had traveled, your opinion would hold more water.

~~~
ollie87
I've been all over the world. I still think Cadbury's chocolate is shit.

~~~
ionwake
I was pointing out why your previous comment was not being taken seriously, it
was not a challenge.

------
gonzo
Knew before clicking that it would be "Herman the German"

~~~
gonzo
Downvoted by people who weren't there...

~~~
mijoharas
I would assume people downvoted because your comment didn't add anything of
any value, and comes off as sounding quite racist. (In addition, he's
austrian[0])

[0]
[https://en.wikipedia.org/wiki/Hermann_Hauser](https://en.wikipedia.org/wiki/Hermann_Hauser)

~~~
gonzo
I know he's Austrian, and I can't help that it sounds "quite racist".

It's how people referred to him at Acorn, then ARM.

I worked with a number of them at Tadpole during the early-mid 90s, and got to
meet Hauser once, at the Oveletti lab.

------
stuaxo
Not sure what will hap happen, the ways of running businesses in both
countries are very different and not really compatible often.

