Globalization, as it stands, is far more than the global allocation of trade, investment, industry, and capital. Globalization also encompasses the global utilization of knowledge, information, technology, and talents. In the process of globalization, multinational corporations are "adepts" who utilize a variety of global resources. However, under the tide of anti-globalization, the use of comparative advantages to allocating resources globally has become an ideal model. As the geopolitical game intensifies, not only the global supply chain needs to be restructured, the sharing of scientific and technological knowledge and the utilization of talents will also be facing new obstacles.
Cambridge, a university city in the United Kingdom, is known to be one of the foremost intellectual powers in the world, with its thousands of scientific and technological personnel. Many technological companies hope to gain a foothold in Cambridge because they value scientific research talents here. Companies such as Amazon, Microsoft, and Apple all employ well-educated research teams in the city.
Cambridge recently found itself to be the center of two large technology giants. American chipmaker Nvidia and Chinese hardware maker Huawei have both made huge expansion plans in Cambridge, but both companies need to overcome some major obstacles to realize this dream.
Nvidia hopes to acquire the Cambridge-based Arm Holdings at US$ 40 billion and establish a new top-notch artificial intelligence center in Cambridge. Huawei on the other hand plans to build a US $1.3 billion research laboratory in Sawston, about 8 miles from the Cambridge city center. Arm is the world's leading semiconductor intellectual property (IP) provider, with its headquarter in Cambridge. It is currently owned by SoftBank and is widely regarded as the crown jewel of the British high-tech industry, where its chips power most smartphones and many other devices around the world. Arm has designed a large number of cost-effective, low-energy RISC processors, related technologies, and software; more than 95% of the chips in smart phones and tablets in the world today use the Arm architecture.
The once very common company M&A asset transactions in the market are now becoming different in the current geopolitical environment. Arm CEOSimon Segarssaid that regulators are likely to block the sale of Arm to Nvidia. Allegedly, Chinese chipmakers urge Chinese regulators to review the acquisition. They worry that the acquisition will give Nvidia too much control over a basic technology used in phones and data centers around the world. In the words of Segars, "it's a tough place at the moment with geopolitics so we'll have to play that very carefully," adding that in countries where ARM operates, clearance will "take a long time".
According to theFinancial Times, the 30-year-old Arm's sale plan has been criticized since it was announced on September 13. Between September 16 and September 28, among the 1,771 IT experts surveyed by the Chartered Institute for IT, 70% said they believed that the British government should intervene in the acquisition because Arm is a global leader in digital technology. The British government, which can theoretically intervene under the Companies Act, previously stated that it was reviewing the transactions. The Competition and Market Authority (CMA), a supervisory agency that oversees international acquisitions, may also get involved.
Arm's co-founderHermann Hauserwas among the first to express shock at the Nvidia deal, termed it "a disaster for Cambridge, the United Kingdom, and Europe." British Shadow Secretary of State for Business, Energy and Industrial Strategy Ed Miliband, and Member of Parliament Daniel Zeichner also expressed concern. Some worry that if Nvidia decides to move Arm's headquarters to the United States and divide the company into different Nvidia divisions, thousands of Arm employees may lose their jobs. There are also concerns that this acquisition will undermine Arm's business model, which involves licensing chip designs to approximately 500 other companies, including several companies that directly compete with Nvidia.
For Huawei, its investment in Cambridge faces a different type of challenge.
On June 25 this year, Huawei received approval from the Cambridge City Council to build R&D facilities. At that time, Huawei stated that the 50,000-square-meter laboratory in Sawston would create 400 jobs. However, as the United States "encircles and suppresses" Huawei globally and pushes countries to reject Huawei on the grounds of national security, the future of Huawei's long-term investment in the UK seems increasingly uncertain. In July of this year, the United Kingdom announced that it would ban the use of Huawei's 5G network. By the end of this year, British mobile network operators will be forced to stop purchasing equipment from Huawei. By 2027, they will also be required to strip Huawei equipment from the infrastructure. On October 8, new changes took place. An investigation by the British Parliament concluded that there was "clear evidence of collusion" between Huawei and "Chinese Communist Party apparatus", despite Huawei has provided services in the UK for 20 years and has employed approximately 1,600 employees in 20 offices in the UK.
Judging from the current geopolitical situation, Huawei is almost certain to be "expelled" from the British market. This will happen not just in the United Kingdom, which is closely following the United States, but Germany, Italy, and most European countries will gradually reduce or even reject Huawei's technology, products and investment as well. Geopolitical factors are exerting increasing influence in the market.
From the above two different examples, we can see that for technological companies that truly have important core technologies, normal market mergers and acquisitions may be hindered by the state. Countries with similar ideologies and values will be interfered with because of employment, business, and technological interests. For countries with different values, they will arbitrarily be hindered and interfered with under the pretext of "national security". If this continues in an anti-globalization world, a phenomenon of separation between key core technology R&D and high-end scientific research talents will be formed, which is undoubtedly bad for the global market.
Final Analysis Conclusion:
The wave of anti-globalization and geopolitical games are changing the world. There are already signs that there will be more and more "separation" in the fields of key core technology R&D and high-end scientific research talents. For Chinese companies like Huawei, they will be blocked by such walls.
