Lee Jae-yong to Visit UK Today... Eyes on Participation in 'ARM' Acquisition Battle

Mexico and Panama Followed by UK Business Trip
Attention on Trillion-Won Scale M&A After Harman Acquisition
Deal Completion Expected to Create System Semiconductor Design Synergy

Samsung Electronics Vice Chairman Lee Jae-yong is greeting employees during his visit to the Samsung Engineering Dos Bocas refinery construction site in Mexico on the 10th (local time). (Photo by Yonhap News)

[Asia Economy Reporter Moon Chaeseok] It was confirmed on the 16th that Samsung Electronics Vice Chairman Lee Jae-yong visited the United Kingdom. The UK is home to the world-renowned semiconductor intellectual property (IP) company 'ARM,' which is currently up for sale. Industry interest is high over whether the pace of large-scale mergers and acquisitions (M&A) discussions will accelerate.

According to industry sources on the day, the chartered plane carrying Vice Chairman Lee arrived in the UK. Lee's movements, actively visiting domestic and international sites after the Liberation Day pardon and amnesty under the banner of 'New Samsung,' are receiving great attention as the success of the M&A deal hinges on this trip.

Currently, the market mentions ARM along with Germany's automotive, industrial, and power system semiconductor company 'Infineon' and the Netherlands' 'NXP' as potential M&A candidates for Samsung Electronics. Earlier, Samsung Electronics officially announced plans for a large-scale M&A at the beginning of the year. ARM has been considered a strong candidate.

ARM is a company that holds core chip design technology known as the 'brain' of IT devices such as computer central processing units (CPUs) and smartphone application processors (APs). The AP market share based on ARM designs exceeds 90%. It is a company that builds its own semiconductor designs and earns revenue by selling licenses. With Samsung Electronics increasing its investment in system semiconductors, a successful acquisition of ARM is expected to secure world-class semiconductor design and production capabilities, creating significant synergy.

Samsung Electronics' mobile AP 'Exynos' is also based on ARM's design technology. Samsung ranks second in market share in the foundry (semiconductor contract manufacturing) business after Taiwan's TSMC, but its technological competitiveness in semiconductor chip design is considered relatively weaker. As of the second quarter, Samsung Electronics held a 7.8% share of the global mobile AP market, ranking fifth.

Vice Chairman Lee had been tied down by 'judicial shackles.' Samsung Electronics also found it difficult to achieve major M&A results. Since acquiring automotive parts maker Harman for a record $8 billion (about 9.3 trillion KRW) in 2016, Samsung has not completed any 'trillion-won scale' M&A deals.

Ultimately, the focus is on whether an M&A deal will be completed within the year. Samsung has ample financial resources, with cash assets alone reaching 125 trillion KRW. Samsung Electronics Vice Chairman Han Jong-hee stated at 'IFA 2022,' Europe's largest home appliance exhibition held in Berlin, Germany, on the 2nd (local time), that "a significant portion is underway" regarding large-scale M&A efforts.

There is cautious speculation in the industry that Vice Chairman Lee may meet President Yoon Suk-yeol, who will visit the UK on the 19th (local time), and attend the funeral of the late Queen Elizabeth II. It is also expected that Lee will visit the United States next week before handling the court schedule related to the unfair merger of Samsung C&T and Cheil Industries on the 22nd. Since Samsung Electronics is building a second foundry plant worth $17 billion (about 21 trillion KRW) in Taylor, Texas, attention is focused on whether Vice Chairman Lee will attend the groundbreaking ceremony.

Meanwhile, Vice Chairman Lee has been on a business trip to Latin America, including Mexico and Panama, since the 8th. In addition to inspecting local business sites, he requested support from various governments for the bid to host the 'Expo 2030 Busan World Expo.'

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