[Special Stock] AD Chips, ARM Semiconductor Challenger Design Platform... Samsung-Intel 'Money War'

[Asia Economy Reporter Hyungsoo Park] ADChips, a semiconductor design specialist company, is showing strong performance. The news that it is developing a semiconductor design platform using open source technology, which is gaining attention in the semiconductor industry, appears to be influencing its stock price. Amid fierce competition between Samsung Electronics and Intel in the semiconductor market, expectations for an increase in corporate value due to technology investment have grown.

As of 2:59 PM on the 3rd, ADChips is trading at 1,330 KRW, up 15.65% from the previous day.

On this day, ADChips announced that it is developing a new semiconductor design platform based on the open source design technology ‘RISC-V’.

‘RISC-V’ is a semiconductor design technology that began development in 2010 at the University of California, Berkeley. The ‘RISC-V’ Association, officially launched in 2016, has over 250 member companies including Samsung Electronics, SK Hynix, Google, Microsoft, Qualcomm, and Huawei.

A company official explained, “We are developing a new semiconductor design platform, the ‘RISC-V platform,’ which integrates the ‘RISC-V’ core with various semiconductor design IPs built over the past 25 years, enabling shorter development periods and cost reduction.”

RISC-V technology is seen as a rival to ARM-based semiconductor technology, which holds a 90% market share in the smartphone AP sector. ‘RISC-V’ has advantages over ARM, reducing area by 30-50% and power consumption by 60%, prompting semiconductor design companies to move away from the ARM ecosystem and pursue independent development through ‘RISC-V.’

ADChips’ strategy is to promptly develop a semiconductor design platform based on ‘RISC-V’ technology to proactively respond to the changing semiconductor design field.

A company representative said, “Once the semiconductor design platform under development is established, it is expected that semiconductor design can be carried out easily and quickly in the ‘RISC-V’ environment,” adding, “We will accelerate development to complete the platform by next year and provide it to semiconductor design companies.”

The largest shareholder of ADChips is Golden Age Invest, holding a 4.12% stake. The company is pursuing a rights offering followed by a general public offering of unsubscribed shares. Through the investment prospectus, it was explained that since Golden Age Invest became the largest shareholder in 2015, there has been no history of management disputes, and it is judged that there will be no difficulties in exercising management rights by the current largest shareholder and management. The funds raised through the capital increase will be used for debt repayment and facility investment.

Meanwhile, the global semiconductor industry is witnessing a fierce battle for first place between Samsung Electronics and Intel. Recently, major foreign media reported that the success of Samsung and Intel in the semiconductor market depends on their ability to mobilize funds, with both preparing to invest more than $100 billion (about 115 trillion KRW). Samsung Electronics recorded semiconductor division sales of $19.7 billion (about 22.7 trillion KRW) in the second quarter of this year, surpassing Intel’s total sales of $19.6 billion (about 22.5 trillion KRW). This is the first reversal in about three years since the third quarter of 2018.

At the Q2 earnings conference call on the 29th of last month, Seobyeonghun, Vice President in charge of IR at Samsung Electronics, stated, “Strategic M&A of companies with core competencies is absolutely necessary to find future growth breakthroughs,” and “We are positively viewing the possibility of meaningful M&A within three years.” This reaffirmed the statement made earlier this year by Choi Yoonho, President of Samsung Electronics’ Management Support Office, about “meaningful M&A within three years.”