Samsung Sitting on a Mountain of Cash
Samsung Electronics is expected to announce large-scale merger and acquisition (M&A) deals soon. German chipmaker Infineon Technologies and Dutch semiconductor company NXP Semiconductor have emerged as Samsung's M&A targets as it aims to foster its non-memory business.
“I think we will be able to deliver good news soon,” said Han Jong-hee, vice chairman of Samsung Electronics’ DX Business Division, when asked about the possibility of M&A deals at CES 2022 in Las Vegas on Jan. 5 (U.S. local time).
Market watchers say that Samsung Electronics may acquire an automotive semiconductor company. Candidates include Infinion and NXP, which make microcontroller units (MCUs) and power management integrated circuits (PMICs) for automobiles.
Samsung Electronics unveiled universal flash storages (UFSs) for vehicles in 2017. Then, it supplied the vehicle processor Exynos Auto 8890 to German carmaker Audi. It also supplied the Exynos Auto V9 to the German carmaker in 2019. Late last year, it started to supply high-performance solid state drives (SSDs) and graphic DRAMs to overseas automakers.
“If we can go faster through M&A deals, we will choose them rather than going it alone,” Han said, “We have left open the possibility of making M&A deals in both the parts and set sectors.”
Early last year, Samsung Electronics announced that it will push for meaningful M&A deals within three years.
Supply chain competition may become a variable in Samsung Electronics’ pursuit of M&A deals. As the supply of semiconductors became insufficient due to the COVID-19 pandemic, countries are placing top priority on securing chips and do not want their chipmakers sold to companies of other countries.
“Europe will not allow Infinion or NXP to be sold off to companies of other countries,” said a semiconductor industry insider. “What will happen to the European automobile industry if such companies are sold off to companies of other countries at a time when European carmakers are suffering a shortage of semiconductors?”
Samsung Electronics has more than 100 trillion won in cash. According to the company's financial statements for the third quarter of 2021, Samsung Electronics’ net cash -- cash and cashable assets minus loans -- amounted to 101.4 trillion won.