NVIDIA's ARM Acquisition and Huawei's Semiconductor Push Shake Up the Semiconductor Market

NVIDIA's ARM Acquisition Creates Semiconductor Giant
South Korea's Semiconductor Exports Surge Amid Huawei Sanctions and Last-Minute Buying
Samsung Electronics, SK Hynix, and Other Domestic Semiconductor Firms Struggle to Find Alternatives

On the 13th (local time), Nvidia announced that it will acquire ARM Holdings from SoftBank Group (Chairman Masayoshi Son) for $40 billion (approximately 47.4 trillion KRW). Screenshot from Nvidia's official website.

[Asia Economy Reporters Changhwan Lee, Dongwoo Lee] The acquisition of the British semiconductor design company ARM by the U.S. graphics processing unit (GPU) company Nvidia has created a giant that will shake up the semiconductor industry. As the world's largest GPU company, Nvidia now has a portfolio covering everything from design to GPUs by acquiring a global semiconductor design company.

As a result, the management risks for Samsung Electronics and SK Hynix, which rely on ARM for semiconductor design, have also increased. The global semiconductor industry is being shaken as it faces Nvidia-related risks on top of the crisis caused by U.S. sanctions on Huawei.

On the 13th (local time), Nvidia announced that it would acquire ARM Holdings from SoftBank Group (Chairman Masayoshi Son) for $40 billion (approximately 47.4 trillion KRW). This is the largest merger and acquisition (M&A) amount in the history of the semiconductor industry.

With this acquisition, Nvidia will cover not only its core GPU business but also artificial intelligence (AI) semiconductors and design. It is expected to exert powerful influence across various fields, raising concerns about monopolistic practices.

It will inevitably have a negative impact on Korean companies such as Samsung Electronics and SK Hynix. If Nvidia signs semiconductor design license agreements with competitors through ARM, it could gain a competitive advantage by leveraging patents.

Most semiconductor companies worldwide use ARM's technology to manufacture semiconductors. With Nvidia acquiring ARM, there is a possibility that ARM's semiconductor designs will no longer be sold but used exclusively. In fact, Nvidia filed a complaint with the U.S. International Trade Commission (ITC) in 2014, accusing Samsung of patent infringement.

To make matters worse, the Huawei risk looming just one day away is an urgent issue for Korean companies to resolve. According to the Korea Customs Service, semiconductor exports from Korea increased by 43.2% from the same period last month between the 1st and 10th of this month. This is a significant jump compared to the 2.8% increase in semiconductor exports last month compared to the previous month.

This was largely due to Huawei rapidly increasing its semiconductor orders ahead of U.S. sanctions. Huawei is stockpiling not only in Korea but also in Taiwan. Last month, Taiwan's exports to China reached a record high of $14.457 billion, up 22.9% from the previous month. It is reported that Huawei has secured enough components to last more than six months.

An industry insider said, "Ahead of the U.S.'s strong sanctions on Huawei, the company rapidly increased orders to build up inventory," adding, "Our companies are also operating their production lines at full capacity even today, trying to prepare the final shipments."

The problem starts after the 15th. With the effective loss of Huawei, one of the major customers, due to U.S. sanctions, Korean companies must find alternative customers or expand new business areas to prepare countermeasures.

Park Jaegun, chairman of the Semiconductor Display Society, said, "As Huawei secured large volumes, Samsung Electronics and SK Hynix's memory performance in the third quarter of this year will see increased sales," but added, "However, in the first half of next year, Samsung's NAND and Hynix's DRAM sales are expected to temporarily slow down."

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