SK Hynix Says It Won't Pursue Joint Acquisition of ARM
Korea’s leading semiconductor companies have taken a step back regarding a possible joint acquisition of ARM, a global chip design company. As SoftBank chairman Masayoshi Son has demanded a price excessively higher than its actual value, ARM is losing its attractiveness as an acquisition target, experts say.
SK Hynix said in a public disclosure on Oct. 28 that it will not pursue a joint acquisition of ARM. The disclosure was in contrast with the company's previous announcement issued in March. At the time, it said, “We are continuously reviewing various strategic options, including a joint acquisition of ARM, to sharpen our business competitiveness and enhance our corporate value.".
The SoftBank chairman met with Samsung Electronics chairman Lee Jae-yong on Oct. 5 to discuss cooperation between ARM and Samsung. But reportedly, they discussed no specific details about the sale of ARM shares. At that time, ARM and SoftBank laid out various cooperation plans to Samsung Electronics. Most analysts say that Samsung has not been enthusiastic about acquiring ARM, so it did not make any concrete move to acquire a stake in it.
When SoftBank’s plan to sell ARM to Nvidia fell apart in February this year, Intel CEO Pat Gelsinger and Qualcomm CEO Cristiano Amon expressed their intention to pursue a joint acquisition of ARM. However, no deal was made as Son quoted a very high price for ARM, analysts say.
ARM’s enterprise value is not as high as it used to be. The current price of ARM is said to stand at over US$60 billion, an increase of at least US$20 billion from US$40 billion offered by Nvidia. However, ARM’s annual sales are only US$2.7 billion. Recently, open-source RISC-V technologies such as SiFive have emerged, threatening ARM’s competitiveness. Semiconductor industry insiders say ARM's enterprise value does not exceed US$50 billion.