At first glance, the aborted sale of Arm Ltd., the U.K. semiconductor designer, to Nvidia Corp., a U.S. semiconductor company, is a cautionary tale for investors, yet another in the cascade of woes for Softbank Group, the Japanese company that owns the company.
Don’t be fooled: The Arm saga exemplifies the complexities of the emerging national security economy, a tale not only of techno-nationalism, but also of its dynamics and repercussions, intended or not.
Arm is a Cambridge-based company that is one of the most important companies in the digital universe. It designs semiconductors. Its blueprints are used in some 25 billion chips that are produced each year; they’re found in virtually every product, from cell phones to cars. Its central role in the digital world has prompted comparisons to Switzerland: Both are neutral and serve all comers. An effective and efficient semiconductor market depends on Arm’s refusal to play favorites among its customers.