FTC Sues to Block a $40 Billion Acquisition in the Semiconductor Chip Industry

  • The FTC filed an administrative complaint against U.S. chip manufacturer Nvidia Corp. and U.K. chip design provider Arm Ltd. and its parent company (collectively “Arm”) to stop Nvidia’s $40 billion acquisition of Arm over allegations that the acquisition would harm competition and stifle innovation in semiconductor chips in violation of the FTC Act and the Clayton Act.
  • The complaint alleges that Arm’s technology is critical for both Nvidia and its competitors in three worldwide chip-related markets and that the acquisition will give Nvidia the ability to undermine its competitors because the acquisition will provide Nvidia with access to competitive intelligence about other chip manufacturers who are Arm’s licensees. The complaint further alleges that the acquisition will stifle innovation because Arm would no longer pursue projects in conflict with Nvidia’s interests and would not develop beneficial new technologies that may harm Nvidia’s business objectives.
  • The complaint seeks injunctive relief to stop the acquisition or, in the alternative, structural relief, such as divestiture or reconstitution of assets, among other things.