Samsung Electronics, Possibility of Abandoning NXP Acquisition... German Bosch Advocates Change in Vehicle Parts Supply Method

[Image source=Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Although Samsung Electronics announced a massive investment worth 240 trillion won, reports have emerged that it may abandon the acquisition of automotive semiconductor company NXP.

On the 24th (local time), SamMobile reported, citing sources, that Samsung Electronics is likely to withdraw from the bidding for the Dutch semiconductor company NXP.

Samsung Electronics is considering abandoning the acquisition due to regulatory issues that may arise during the acquisition process, as the acquisition price of NXP soared to $68 billion (80 trillion won).

Although Samsung Electronics has sufficient cash to acquire NXP, it is interpreted that the company is mindful of potential antitrust controversies.

SamMobile introduced the opinion of a Samsung Electronics official, saying, "NXP was on Samsung's purchase list but was dropped. It has become too large to acquire." Considering the market shares of NXP and Samsung Electronics, there are predictions that merger approval from some countries, including China, will be difficult.

NXP is a semiconductor company spun off from Philips, mainly producing automotive semiconductors. If Samsung Electronics acquires NXP, it can strengthen its position not only in the automotive sector but also in 5G and Internet of Things (IoT) fields.

As the shortage of automotive semiconductors worsens and vehicle production cuts continue, Bosch, a vehicle parts company, argued that the parts supply method needs to be revised.

Harald Kr?ger, CEO of Bosch, said in an interview with CNBC, "Some semiconductors take six months from order to delivery. In this situation, we cannot receive orders every two weeks."

Bosch also believes that the increasing demand for semiconductors due to the expansion of autonomous driving functions and electric vehicles is not unrelated to the semiconductor supply shortage.

Kr?ger CEO also said that the era when automakers led the inventory of automotive semiconductor parts is over.

Expressing concern that the semiconductor shortage will continue until 2022, Kr?ger CEO argued that semiconductor manufacturers and automakers need to come together to openly discuss changes in the supply chain and the prolongation of delivery times.