The Chairman of SoftBank and ARM, Masayoshi Son, will visit South Korea next October for discuss a potential strategic alliance between ARM and Samsung. According to Bloomberg, it was Son himself who confirmed the news. But he has not offered many more details, so the nature of this alliance that Son is going to propose to Samsung is unknown. There are even rumors that it may be considering selling ARM to Samsung.
These rumors have gained strength in recent hours for various reasons. The first is the mention that the meeting that Son is going to hold with the Samsung board is strategic. The second, that the trip to discuss the aforementioned alliance is going to be made by himself, and not other managers of lower positions. And the third, the confirmation of the meeting by Samsung, something that Samsung’s own Vice President, Jay Y. Lee, has done.
Lee told reporters last Wednesday, on his return from a two-week trip to Europe, that “when President Son comes to Seoul next month, he will probably make some kind of proposal on ARM«.
Earlier this year, Son’s planned sale of ARM to Nvidia fell through after several ARM customers, including Qualcomm, protested. Also because the United States Federal Trade Commission took legal action against the operation. SoftBank then focused on preparing for ARM’s IPO on the New York Stock Exchange in 2023 seeking a $60 billion valuation, but with a plan to continue to control ARM stock. All in the midst of a stock market crash related to semiconductors. And with processor and memory sales down, they’re unlikely to recover anytime soon.
As a consequence, doubts have probably arisen in SoftBank about the valuation they can get from ARM if they take it public in early 2023. In this scenario, selling at least part of ARM to Samsung, or to a group of companies led by the South Korean giant, may make more sense to them. In fact, Son’s trip and his negotiations could serve to boost ARM’s value in the eyes of other buyers.
But it will be necessary to see what happens in said meeting, because ARM has a great strategic importance for Samsung. The company employs ARM-designed CPU cores and architectures in its SoCs for smartphones, advanced consumer electronics devices, and various other products. In fact, even Samsung’s SSD controllers use ARM Cortex-R cores. In addition, the importance of these cores for storage will continue to grow in the coming years, as file and data storage add computing capabilities. And storage is one of the most important divisions of Samsung’s business.
Buying ARM would make Samsung a CPU and GPU behemoth, which may come as a relief to the company in this area, because it hasn’t been successful with designing its own CPU cores. It hasn’t made them competitive. But for now it is not known if the agreement that Son is going to propose will be a collaboration or a purchase. And if the latter case occurs, there are no guarantees that the regulatory entities will not oppose the operation, as has already happened with Nvidia. Things could be easier if Samsung buys only a part of ARM to ensure that a rival company does not gain control of some areas and technologies of the company.
