Reports: NXP, Infineon top Samsung’s shopping list
Mergers of chip companies set a record in 2020 but Samsung was notable by its absence (see Mergers of chip companies set a record in 2020). During a conference call with investors on January 28, Choi Yoon-ho, CFO of Samsung Electronics, said that while a lot of preparations for M&As have been in progress there will also be massive facility investments, according to a Korea Times report.
Automotive semiconductors is a high growth sector where Samsung has little chip presence. It is also one where chips are currently in short supply and likely to be subject to large price increases in the short-to-medium term (see Report: Chipmakers raising prices 10 to 20 percent) prompting speculation that Samsung may make a play for one of the leaders in the automotive chip market.
At the same time reports have said it may try to acquire Globalfoundries to increase its economies of scale in the foundry business where it lies in second place to TSMC in terms of technology. Mubadala, the sovereign wealth fund of Abu Dhabi that owns Globalfoundries, has been rumoured to be in sales discussions on several occasions in the past but the plan of record is for Globalfoundries to go public in late 2022.
Next: Plenty of cash
Samsung was mentioned in connection with an acquisition of NXP several years ago but was side-lined when Qualcomm agreed a $44 billion deal to acquire the Dutch chip company (see Qualcomm, NXP discuss merger, say reports). That acquisition did not proceed as it failed to gain approval from Chinese authorities (see NXP acquisition by Qualcomm about to collapse). And then again in 2019 Samsung was rumoured to be interested in acquiring one of NXP, Xilinx and Infineon. AMD has now made a deal to acquire Xilinx (see AMD values Xilinx at $35 billion in take-over bid).
At the end of the 3Q20 Samsung’s cash position was 117.9 trillion won (about US$105 billion) providing plenty of cash to buy any of the companies, or more than one. But it is not clear that China would be any more open to Samsung as a consolidator in the semiconductor sector than it was to Qualcomm. And geopolitical tension has increased greatly since the Qualcomm-NXP deal was abandoned. Europe may also have political reason to object to an acquisition of one of its few chip companies of global scale. Semiconductor know-how is increasingsly seen as a strategic asset (see Europe will try to rebuild semiconductor capability using pandemic recovery funds).
Related links and articles:
News articles:
Report: Chipmakers raising prices 10 to 20 percent
Qualcomm, NXP discuss merger, say reports
NXP acquisition by Qualcomm about to collapse
Mergers of chip companies set a record in 2020
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