ARM Acquisition Candidates Mentioned: Apple and Nvidia, What About Samsung?

Masayoshi Son, Chairman of SoftBank

[Asia Economy Reporter Changhwan Lee] The semiconductor design company ARM, owned by Japan's SoftBank, is drawing significant attention in the semiconductor industry as it is put up for sale. Since ARM holds an almost monopolistic position in the mobile semiconductor design market, many companies are reportedly showing interest in acquiring it.

According to foreign media on the 26th, SoftBank recently approached Apple and Nvidia regarding the acquisition of ARM. ARM is a semiconductor design specialist company, and more than 95% of the world's mobile semiconductors are manufactured based on its designs, demonstrating its substantial influence. Leading global IT companies such as Apple, Qualcomm, Samsung Electronics, and Huawei pay to use ARM's semiconductor designs.

SoftBank, led by Chairman Masayoshi Son, acquired ARM in 2016 for $32 billion (approximately 38 trillion won). However, after experiencing management difficulties due to several failed investments including WeWork, SoftBank is considering selling its stake in ARM.

Currently, Nvidia, a U.S. graphics card company, appears to be showing strong interest in ARM. Nvidia has been expanding its business areas into data centers and artificial intelligence (AI) for several years, and it sees acquiring ARM as a way to create synergy with its existing businesses.

Apple is also one of the potential candidates for acquiring ARM. Apple was one of the founding companies of ARM in 1990, along with Acorn in the UK and VLSI Technology in the U.S.

If Apple acquires ARM, its influence in the semiconductor industry is expected to grow even larger. Companies like Samsung Electronics and Huawei use ARM's designs, but if ARM becomes owned by Apple, these companies would be using a competitor's designs to manufacture smartphones.

[Image source=Yonhap News]

The same applies if Samsung Electronics were to acquire ARM, and there are expectations that monopoly issues would arise. Accordingly, the semiconductor industry suggests that acquiring ARM would be quite burdensome for either Apple or Samsung Electronics. It is also analyzed that Samsung Electronics' lack of strong interest in acquiring ARM is due to these reasons.

The U.S. business magazine Fortune analyzed that Apple's interest in acquiring ARM seems related to its dominance in the mobile device market, but many obstacles are expected if it attempts the acquisition.

Competitors such as Samsung and Google may oppose Apple's attempt to acquire ARM, and antitrust regulators could intervene to block the acquisition. ARM is currently reported to be strongly denying the possibility of being acquired by Apple.

Additionally, the astronomical price tag, estimated to be around 40 trillion won, is cited as a factor making the acquisition difficult. Even when SoftBank initially acquired ARM, there was controversy over the inflated price. Although ARM holds monopoly power, its revenue is only about 1 to 2 trillion won, and its operating profit is just a few hundred billion won.

At the time of acquiring ARM, Chairman Son said, "It was the biggest bet of my life, looking 50 moves ahead in Go." He interpreted this as a large-scale bet based on the expectation that the importance of semiconductors would increase in the upcoming AI (artificial intelligence) era. However, putting the company back on the market just four years after the acquisition has led to views that this bet may have failed.

This content was produced with the assistance of AI translation services.