Arm, Qualcomm Compete for Alphawave; Stock Soars 21%!
On the evening of April 1, it was reported that Arm, the world’s largest semiconductor IP company under SoftBank, is seeking to acquire Alphawave, the fourth-largest semiconductor IP company globally. Sources familiar with the matter revealed that the acquisition aims to secure critical technologies beneficial to AI processors. Alphawave has been in discussions with its stakeholders regarding a potential sale after receiving acquisition interest from Arm and other potential buyers.
However, two sources stated that after initial talks, Arm decided to halt further progress on the acquisition. Another report indicated that Qualcomm recently made an offer to acquire Alphawave. Under UK acquisition rules, Qualcomm must submit a formal offer by April 29, or it will be considered to have withdrawn from the acquisition process.
Arm's intention behind the acquisition of Alphawave primarily revolves around securing its SerDes (Serializer-Deserializer) technology, which is a widely-used, high-speed serial communication technology for time-division multiplexing (TDM) and point-to-point (P2P) data transfer. This technology converts low-speed parallel signals into high-speed serial signals at the transmission end, which are then transmitted via fiber optics or copper wires. At the receiving end, the serial signals are converted back into parallel signals. By utilizing the transmission medium’s channel capacity efficiently, SerDes technology reduces the number of required transmission channels and component pins, thus enhancing data transfer speeds and significantly lowering communication costs.
High-speed SerDes is also one of the core competitive advantages for Alphawave, positioning it against rivals like Broadcom. Broadcom has successfully won custom chip orders from major clients, including Google and OpenAI, with its SerDes technology. The custom chip market is expected to reach $60 billion by 2028. Additionally, NVIDIA has developed its own SerDes technology and has expressed interest in licensing it to other companies.
Alphawave also operates a joint venture in China called WiseWave, in collaboration with the Chinese investment firm Zhiluo Capital.
According to Reuters, Alphawave is currently working with its investment bankers to explore the sale options and has attracted interest from Arm and other potential buyers. However, following initial discussions, two sources stated that Arm decided not to pursue the acquisition further.
In a separate report, Reuters also revealed that Qualcomm recently made an acquisition offer for Alphawave. Under UK acquisition regulations, Qualcomm must submit a formal offer by April 29 or risk forfeiting the deal. It is worth noting that Qualcomm's executives have previously confirmed the company's intention to re-enter the server chip market, which could be a key factor in its interest in acquiring Alphawave.
SoftBank, Arm, Qualcomm, and Alphawave all declined to comment on the developments. The acquisition rumors caused Alphawave's stock price in the UK to surge by as much as 21%, marking the largest increase since September 2021. The stock later settled with a gain of 14.84%, reaching £1.0738 per share, giving the company a market value of approximately £820 million ($1.04 billion).
