Meeting at Samsung Seocho Headquarters on the 4th... Kyung Kye-hyun and President No Tae-moon Also Present
Only Comprehensive Cooperation Seems to Have Been Discussed
[Asia Economy Reporter Han Yeju] Samsung Electronics Vice Chairman Lee Jae-yong and SoftBank Group Chairman Masayoshi Son met on the 4th. However, it is reported that there were no specific discussions regarding Samsung's much-anticipated acquisition or equity investment in semiconductor design company ARM.
According to the business community on the 5th, Vice Chairman Lee and Chairman Son met on the 4th at the Corporate Club in Samsung Electronics’ Seocho building in Seoul, accompanied by Samsung’s top executives including Kyung Kye-hyun, President of Samsung Electronics’ DS (semiconductor) division, and Roh Tae-moon, President of the MX (mobile experience) division, as well as ARM CEO Rene Haas. The meeting, which included a dinner, lasted until late in the evening.
Chairman Son arrived in Korea through Gimpo Airport on the 1st. Initially, the industry expected that Son would propose a mid- to long-term and comprehensive cooperation plan between Samsung and ARM during this meeting. When Vice Chairman Lee said on his return from a Europe and Latin America business trip on the 21st of last month, "SoftBank Chairman Masayoshi Son will come to Seoul. He will probably make a proposal related to the ARM acquisition then," their meeting became a hot topic. However, it is reported that no concrete details such as ARM’s equity sale were exchanged.
ARM is an IP (intellectual property) vendor that holds core technologies for designing PC central processing units (CPUs) and smartphone application processor (AP) chips. It currently occupies more than 95% of the global smartphone chip design market and has a dominant 90% share in IoT AP chips. Samsung Electronics’ mobile AP, the Exynos processor, is also produced based on ARM designs.
SoftBank attempted to sell ARM to the U.S. semiconductor company Nvidia in 2020 for $40 billion (approximately 47.8 trillion KRW) based on the stock price at the time, but the deal was ultimately blocked earlier this year due to opposition from regulatory authorities in the UK and other countries. Since then, SoftBank has pursued an IPO for ARM instead of a sale, but it is reported to be facing difficulties due to the global economic downturn.
Industry insiders believe that considering regulatory approvals and acquisition funding, it is unlikely that Samsung will acquire ARM alone. Even if an acquisition occurs, it is expected to be a partial equity acquisition through a consortium or an equity investment before ARM’s IPO. Currently, ARM’s valuation is estimated to be between 80 trillion and 100 trillion KRW.
If the equity is jointly acquired, there is expected to be controversy during negotiations over which company will hold the leadership and decision-making power regarding ARM. In this case, it is analyzed that Samsung Electronics’ use of the technology could also face restrictions.
Some speculate that discussions may have included companies related to robotics or AI (artificial intelligence) invested in by the SoftBank Vision Fund. Samsung has identified robotics and AI as future business areas. Previously, Hyundai Motor Group also made a surprise acquisition of the robotics company Boston Dynamics from the Vision Fund.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
