Samsung's Acquisition Unlikely
After Nvidia failed to acquire ARM, Samsung Electronics, SK Hynix, Qualcomm and Intel are being mentioned as those most likely to acquire the U.K. chip designer, whose mobile chip design market share amounts to 90 percent.
ARM's scope of business exactly matches the weak points of the South Korean semiconductor industry, where manufacturing is much more developed than design, packaging and back-end processes. This is why many are calling for Samsung Electronics and SK Hynix to take over ARM.
However, according to those in the industry, acquisition by Samsung Electronics or SK Hynix is rather unlikely. “Samsung Electronics in particular is doing foundry business with chip designers as main clients, which means its ARM acquisition is unlikely to be as useful as thought,” one of them said, adding, “Global fabless companies that have designed chips based on royalty payment to ARM may stop doing business with Samsung Electronics for fear of trade secret exposure.”
Antitrust issues are another reason why neither Samsung Electronics nor SK Hynix is likely to become a new owner. The issues are why Nvidia’s attempt failed. The U.K. government is still regarding a cross-border acquisition of ARM as tech leak and national security threat. Still another reason is the price, which was approximately US$40 billion during Nvidia’s attempt but jumped to US$60 billion recently.
Under the circumstances, acquisition by a consortium instead of a single company is also being mentioned. “However, this is also not very realistic in that the antitrust issues are not solved at all and, besides, consortium members’ interests need to be coordinated,” an insider said, continuing, “Furthermore, chip design solutions alternative to the expensive company, such as the RISC-V open source, are coming out as companies in the industry are trying to rely less on ARM.”