Chip designer Arm has come under renewed pressure following news that rival Intel is paying more than $3bn for up to 15% of manufacturing group ASML.
Analysts said the move could increase the competitive pressure on Arm, whose shares are down 3.4p at 492.5p in a rising market. Janardan Menon at Liberum Capital, who has been notably negative on the company, repeated his sell recommendation, saying:
The 15% stake by Intel in ASML is broadly negative for Arm. Arm is currently in an extensive battle with Intel for market share in multiple product categories. If there is likely to be much difference between the two camps, it is likely to come mainly from manufacturing process technologies where Intel currently has a lead. By investing in the leading litho supplier, if Intel is able to perpetuate that manufacturing lead, it would enable the company to have an advantage over Arm. We maintain our sell on Arm as we see it gradually losing share to Intel in the smartphone and tablet markets.
