Speculation Arises over Samsung's Possible Acquisition of ARM

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http://www.businesskorea.co.kr/, Jul. 23, 2020 – 

Speculation has emerged that Samsung Electronics may seek to take over ARM, a British fabless company, following foreign media reports that the semiconductor design company will be put up for sale.

ARM is currently 100 percent owned by SoftBank, which is in trouble due to a series of ill-advised investments. It posted a loss of more than 11 trillion won in 2019 as the market values of the "shared economy" companies, including WeWork, where it invested tens of trillion won, have plummeted. Analysts predict that SoftBank chairman Masayoshi Son will be forced to sell off ARM or list it on the stock market to secure funds. At the same time, speculation has emerged that Apple and Samsung Electronics may move to secure ARM shares.

However, industry insiders believe that Samsung Electronics is extremely unlikely to take over ARM. This is because: 1) ARM's profit model is based on openness; 2) the value of ARM has been inflated by SoftBank; 3) and Samsung Electronics will have to clear each country's review of the business combination in order to take over ARM. In fact, the entire mobile semiconductor ecosystem could be disrupted if a certain fabless company takes over ARM, which is called a "fabless company for fabless companies."

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