TOKYO (REUTERS) – SoftBank Group said on Monday (Sept 14) it has agreed to sell chip designer Arm to Nvidia Corp for as much as US$40 billion (S$54.7 billion) in a deal set to reshape the semiconductor landscape.

The sale will see chip firm Nvidia acquire all of Arm’s shares in return for cash and shares, giving SoftBank and the US$100 billion Vision Fund, which has a 25 per cent stake in Arm, a stake in Nvidia of between 6.7 per cent and 8.1 per cent.

Nvidia will pay SoftBank US$21.5 billion in shares and US$12 billion in cash, including US$2 billion on signing.

SoftBank could also be paid an additional US$5 billion in cash or shares depending on Arm’s business performance.

The sale comes nearly four years after the Japanese conglomerate acquired the British chip technology firm for US$32 billion and at a time SoftBank is selling down stakes in major assets to raise cash.

Amid frustration over SoftBank’s share performance, group executives have held early stage talks about taking the Japanese technology group private, a source told Reuters. Those talks could gain momentum following the Arm sale.

The deal, which is subject to regulatory approvals including in Britain, the United States and China, will alter the semiconductor landscape by putting a long-neutral technology vendor to Apple Inc and others under the control of a single player.

Nvidia began as a graphics chip designer and has expanded into products for areas including artificial intelligence and data centers.

The Arm acquisition will put Nvidia into even more intense competition with rivals in the data center chip market such as Intel Corp and Advanced Micro Devices Inc because Arm has been developing technology to compete with their chips.

It gives Nvidia control technology of technology from Arm that could be used to make its own central processor chips, doubling down on Nvidia’s strategy of buying up technologies in parts of the booming data center business where it does not currently play.

Earlier in April, Nvidia completed its purchase of Israel-based Mellanox Inc, which makes high-speed networking technology that is used in data centers and supercomputers.

Arm does not make chips but instead has created an instruction set architecture – the most fundamental intellectual property that underpins computing chips – on which it bases designs for computing cores.

Arm licenses its chip designs and technology to companies like Qualcomm Inc, Apple and Samsung Electronics Co Ltd , which in turn use the technology in their chips for smartphones and other devices.

Apple’s forthcoming Mac computers will use Arm-based chips.