On April 1 local time, Reuters reported, citing three informed sources, that Arm, the world’s largest semiconductor IP company under SoftBank Group, recently attempted to acquire UK-based Alphawave, the fourth-largest semiconductor IP firm globally, to secure critical AI processor-related technologies.
The report states that Arm’s primary goal in acquiring Alphawave is to obtain its SerDes (Serializer-Deserializer) technology. SerDes is a mainstream time-division multiplexing (TDM) and point-to-point (P2P) serial communication technology. It converts low-speed parallel signals into high-speed serial signals at the transmitter end, transmits them via media (fiber or copper cables), and reconverts them into low-speed parallel signals at the receiver end. This technology maximizes channel capacity, reduces the number of transmission channels and device pins, increases data transfer speeds, and significantly lowers communication costs.
With the rapid expansion of data-intensive applications such as AI, high-performance computing (HPC), and 5G, demand for efficient and reliable high-volume data connectivity solutions has surged. High-speed SerDes has become a critical data transmission solution, particularly in AI data centers, with its market expected to reach tens of billions of dollars.
High-speed SerDes is also a core competitive advantage for Alphawave and its rival Broadcom. Broadcom has secured custom chip orders from clients like Google and OpenAI using its SerDes technology, with the custom chip market projected to hit $60 billion by 2028. NVIDIA has also developed SerDes technology and expressed willingness to license it to others.
Beyond IP licensing, Alphawave shifted to shipping silicon products in 2023, leveraging its WidEye DSP architecture and EyeQ advanced diagnostic technology for PAM4 modulation in optical products. These enable 800G and 1.6T data links in AI data centers over fiber or copper cables.
In March, Alphawave unveiled its photonics portfolio for high-speed interconnects, including 3nm DSPs for PAM4 and emerging Coherent-lite modulation, as well as solutions for 800G/1.6T links and active copper cables. These devices facilitate AI-driven high-speed data transmission across hyperscale data center campuses.
For Arm, which is aggressively expanding into the data center market, its core IP portfolio—CPU, GPU, NPU, and multimedia IP—lacks advanced SerDes technology critical for data centers. Industry insiders note that developing SerDes from scratch would take roughly two years and specialized expertise, with even longer timelines to achieve global leadership. Thus, acquiring Alphawave has become a strategic option.
Notably, Alphawave and Arm have existing collaborations. In 2024, the two partnered to develop advanced compute chips based on Arm’s Neoverse Compute Subsystem (CSS) for AI/ML, HPC, data center, and 5G/6G infrastructure. Alphawave also joined Arm Total Design, an ecosystem for building custom silicon solutions on Neoverse CSS, contributing its advanced packaging and connectivity technologies (including PCIe Gen 6.0/7.0, UCIe, 112/224G Ethernet, and HBM subsystems).
According to IPnest, Alphawave ranked fourth in the global semiconductor IP market in 2023 with a 3.1% share, posting the highest revenue growth (22.9%) among the top 10 players.
An Arm acquisition of Alphawave would accelerate its access to SerDes technology, synergize with its existing data center IP, and potentially enter the custom chip market. Earlier reports suggested Arm plans to develop its own server chips for key clients.
It’s worth noting that Alphawave previously formed a China-based JV, WiseWave, with Wise Road Capital, leading to its blacklisting by the U.S. over national security concerns in 2023.
Per Reuters, Alphawave is now working with bankers to explore a sale and has received interest from Arm and other suitors. However, two sources claim Arm halted pursuit after initial talks.
Separately, Qualcomm recently submitted an acquisition bid for Alphawave. Under UK takeover rules, Qualcomm must formalize an offer by April 29 or withdraw. Qualcomm executives have confirmed plans to re-enter the server chip market, likely driving its interest in Alphawave.
Amid acquisition rumors, Alphawave’s UK shares surged 21%—their largest gain since September 2021—before settling at a 14.84% rise to 107.38 pence per share, valuing the company at £820 million ($1.04 billion).