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UK microchip firm Graphcore in takeover talks – report

Graphcore sale
Image credit: IM Imagery / Shutterstock

Bristol-based microchip company Graphcore is exploring a sale into foreign ownership as it struggles to raise new funds, according to reports.

The company was said to be exploring options from major tech firms, including from overseas, amid widening losses.

Graphcore reported losses of $204.6m for 2022, 11% higher than the year prior. Revenue dropped from $5m to $2.7m over the same period. The company said the results were down to a drop in demand for hardware in 2022, as well as wider economic headwinds.

The rumoured takeover discussions, first reported by the Telegraph, come amid an AI boom that has increased demand for semiconductor designs and products.

Cambridge-based microchip unicorn Arm and ChatGPT creator OpenAI have both been rumoured to have shown interest in Graphcore. The companies declined to comment.

In 2022, key investors wrote down their stake in Graphcore after the company lost a major deal to supply Microsoft with processors for cloud computing.

Graphcore declined to comment on a potential sale when approached by UKTN.

The UK government has identified both AI and semiconductors as “critical” technologies for the nation’s “science and technology superpower goals”. The sale of one of Britain’s most prominent firms in these spaces to a foreign entity could be seen as a setback to these ambitions and would have echoes of Arm’s sale to Japanese conglomerate SoftBank in 2016.

The government has since stepped in to block semiconductor deals on national security grounds.

In 2022, the government blocked the sale of Welsh semiconductor factory Newport Wafer Fab to the Netherlands-based company Nexperia under the National Security and Investments Act.

The deal was blocked due to Nexperia’s parent company, Wingtech, having ties to the Chinese state. Newport Wafer Fab eventually agreed to be acquired by US company Vishay, though the government has yet to officially approve the deal.

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