Samsung's acquisition of ARM highly unlikely because of antitrust issues

The latest report by BusinessKorea suggests that Samsung won't be interested in the race to acquire ARM for multiple reasons. Apparently, Nvidia failed to acquire ARM, and it was touted that Samsung Electronics, SK Hynix, Qualcomm, and Intel would be next in line to complete the UK chip designer's acquisition. While ARM's scope of business is perfectly aligned with the weak points of the South Korean giant, an acquisition by Samsung Electronics is rather unlikely.

ARM is in the business of design, packaging, and back-end processes of chip making, whereas companies like Samsung are more focused on manufacturing. However, industry sources say that “Samsung Electronics, in particular, is doing foundry business with chip designers as main clients, which means its ARM acquisition is unlikely to be as useful as thought.” Sources also add that global fabless companies that are or have designed chips with ARM based on royalty payments may stop doing business with Samsung Electronics for fear of trade secret exposure.

A consortium could acquire ARM instead

Antitrust issues are also one of the main reasons why Samsung may pull out of this race for the ARM acquisition, the same reasons because of which Nvidia failed to complete the transaction. The UK government still regards the “cross-border acquisition of ARM as tech leak and national security threat.” Another reason could be the steep price, which was $40 billion during Nvidia's bid and has now jumped to $60 billion recently.

For all these reasons, Samsung may back out of this acquisition. Industry sources also mention the possibility of a consortium acquiring ARM instead of a single company. But this also isn't as smooth as it may sound, because the antitrust issues aren't solved at all, and the interests of all consortium members need to be coordinated.

Sagar Naresh

Business ARM Intel Korea Nvidia Qualcomm SK Hynix UK