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ARM wants to transfer its IoT divisions to Softbank so it can focus on chips

The company expects to complete the move before the end of the year.
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TOKYO, JAPAN - JULY 20:  SoftBank Group Corp. Chief Executive Officer Masayoshi Son, left, shakes hands with ARM Holdings Plc Chief Executive Officer Simon Segars during the SoftBank World 2017 conference on July 20, 2017 in Tokyo, Japan. With 70 speeches and sessions, the annual business event hosted by SoftBank, Japan's multinational telecommunications and internet company, takes place for 2 days until July 21. (Photo by Tomohiro Ohsumi/Getty Images)
Tomohiro Ohsumi via Getty Images

ARM plans to transfer two of its internet of things (IoT) businesses to Softbank (via TechCrunch). If the company's board of directors approves the move, Softbank would then directly oversee those divisions. The Japanese company bought the chip designer in 2016 as part of a blockbuster deal worth £24.3 billion at the time. ARM says the goal of the move is to narrow its focus on its core semiconductor intellectual property business, which should in turn improve growth and profitability.

"Softbank's experience in managing fast-growing, early-stage businesses would enable [the IoT Services Group] to maximize its value in capturing the data opportunity," said ARM CEO Simon Segars. "ARM would be in a stronger position to innovate in our core IP roadmap and provide our partners with greater support to capture the expanding opportunities for compute solutions across a range of markets."

ARM expects to complete the move before the end of September. And while it won't directly oversee the two outgoing divisions, the company still plans to collaborate with them once is everything is said and done. 

Not only are ARM’s designs ubiquitous in the smartphone world, but it’s also had recent success in other computing verticals as well. At WWDC 2020, Apple laid out a plan to move away from Intel’s x86 architecture. The company plans to transition its Mac computers to its own custom-designed chips based on ARM architecture. With dominance on the line, it's easy to see why ARM would want to focus its efforts on its bread and butter at a moment like this.

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