Breaking News
Investing Pro 0
Cyber Monday Extended SALE: Up to 60% OFF InvestingPro+ CLAIM OFFER

SoftBank looks to form a 'strategic alliance' between Arm and Samsung

Stock Markets Sep 23, 2022 04:11PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. FILE PHOTO: An ARM and SoftBank Group branded board is displayed at a news conference in London, Britain July 18, 2016. REUTERS/Neil Hall 2/3
 
INTC
+4.05%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
QCOM
+7.53%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
AAPL
+4.86%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NVDA
+8.24%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
005930
+0.48%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
SSNLF
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Sam Nussey and Joyce Lee

TOKYO/SEOUL (Reuters) -SoftBank Group Corp founder and CEO Masayoshi Son said on Thursday he plans to meet with Samsung Electronics (OTC:SSNLF) to discuss a potential "strategic alliance" between the South Korean tech giant and chip designer Arm.

The billionaire will make his first visit to Seoul in three years. "I'd like to talk with Samsung (KS:005930) about a strategic alliance with Arm," Son said in a statement.

The statement follows remarks by Samsung's Vice Chairman Jay Y. Lee, who was quoted as saying by newswire News1 that Son "may make a proposal" on a visit expected next month. Samsung declined to comment on the report.

SoftBank acquired Arm, whose technology powers Apple (NASDAQ:AAPL)'s iPhone and nearly all other smartphones, in 2016 for $32 billion. A subsequent proposed deal to sell Arm to Nvidia (NASDAQ:NVDA) aroused industry opposition and foundered on regulatory hurdles, prompting SoftBank to outline plans for a U.S. listing of the Cambridge-based firm.

The visit comes amid speculation over the potential formation of an industry consortium to invest in Arm and ensure its neutrality.

"There needs to be someone in the middle mediating to bring various companies together into a consortium, and Son may be trying to play such a role," said Lee Min-hee, an analyst at BNK Investment & Securities.

"A potential proposal could be that companies interested in owning a part of Arm can enter in a pre-IPO placement at a lower price ahead of an IPO next year," he added.

Monetising Arm has become a primary preoccupation for executives at tech conglomerate SoftBank, which has booked a massive loss at its Vision Fund investment arm and sold down its stake in Alibaba (NYSE:BABA) Group Holding to raise cash.

Efforts to list the chip designer, however, come amid a dramatic decline in dealmaking with markets volatile due to soaring interest rates and Russia's invasion of Ukraine. The Philadelphia SE Semiconductor Index is down by around a third for the year to date.

An alliance with Arm could be a strategic fit for Samsung as the market leader in memory chips invests heavily to try to catch up with Taiwan Semiconductor Manufacturing Co in logic chips.

The South Korean conglomerate is still seen as hampered by technical limitations in original technology for non-memory chips such as application processor architecture, which Arm specialises in.

Other possible Arm suitors include Intel Corp (NASDAQ:INTC), whose Chief Executive Pat Gelsinger in February expressed interest in joining a consortium to buy the chip designer.

Samsung rival SK Hynix has also expressed interest in Arm, according to Yonhap news agency. It quoted Vice Chairman Park Jung-ho as saying in March that the chipmaker was considering forming a consortium to buy Arm. The company said at the time that the comment did not refer to a specific plan.

Qualcomm (NASDAQ:QCOM) Inc, which has also been cited as a potential investor, is being sued by Arm, which accuses it of breaching license agreements and trademark infringement.

The discord could cast a shadow over an Arm listing, Redex Research analyst Kirk Boodry wrote in a note to clients.

"Arm probably needs all its customers onside to command a premium valuation," he said.

SoftBank looks to form a 'strategic alliance' between Arm and Samsung
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email