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Why Was Samsung Not Interested in Taking over ARM?
businesskorea.co.kr, Sept. 17, 2020 –
Nvidia's plan to acquire ARM for US$40 billion, if realized, will become the largest deal in the M&A history of the semiconductor industry. Nvidia has agreed to buy all of ARM shares held by SoftBank and its subsidiaries and will seek approval from major countries.
ARM is a fabless company that accounts for more than 90 percent of the basic design of global mobile application processors (APs). If NVIDIA acquires ARM, it will become a semiconductor giant as big as Intel. This is not good news to competitors such as Samsung Electronics, according to the Wall Street Journal; as Nvidia can wield enormous power in the semiconductor industry in the future.
When ARM was put up for sale, some experts raised the possibility of Samsung Electronics jumping into the takeover race. The logic was that as Nvidia can be a threat to Samsung by taking over ARM, Samsung would consider acquiring it. However, Samsung Electronics was not very interested in acquiring ARM. Samsung was reportedly concerned about conflicts between ARM and Samsung's current businesses.
A strong opinion inside Samsung was that acquiring ARM would make it difficult for Samsung to attain the Semiconductor 2030 vision, which aims to make Samsung the top company in the system semiconductor sector by 2030. "Samsung's foundry customers such as Qualcomm still suspect that Samsung may look into the structure of their semiconductors," an industry watcher said. "If Samsung acquires ARM, it will lose many of its foundry customers."
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