Masayoshi Son, the founder and CEO of SoftBank Group, announced on Thursday that he would meet with Samsung Electronics to talk about the possibility of a “strategic alliance” between the South Korean tech giant and the subsidiary of the chip designer.
For the first time in three years, the billionaire will travel to Seoul. Son stated in a statement, “I want to speak with Samsung about the strategic partnership with Arm.
Jay Y., vice chairman of Samsung The declaration comes in response to remarks made by Lee, who was cited by Newswire News1 as having said that the boy “may make a proposal” for the visit, which is anticipated to take place next month. Samsung chose not to respond to the report.
For $32 billion (about Rs. 2,58,663 crore), SoftBank acquired Apple’s division that runs the iPhone and nearly all other devices in 2016. In response to regulatory and industry resistance to the latter’s intended deal to sell the arm to Nvidia, SoftBank announced intentions for a US IPO of the Cambridge-based company.
The visit takes place as rumours of a potential industry consortium to invest in Arm and guarantee its independence are rampant.
According to Lee Min-hee, an analyst at BNK Investments and Securities, “There needs to be someone who mediates to bring different companies together, and the boy might be trying to play that position.”
The possibility of giving businesses interested in buying a piece of Arm access to a pre-IPO placement at a discounted rate before to the IPO the following year was mentioned by the speaker.
Executives at tech firm SoftBank, which suffered significant losses at its investing arm Vision Fund and sold its share in Alibaba Group Holding to obtain money, have made the monetizing arm their main line of work.
However, amid market turbulence brought on by decreasing interest rates and Russia’s invasion of Ukraine, efforts to float the chip inventor drastically failed. For the year so far, the Philadelphia SE Semiconductor Index has decreased by approximately a third.
As the market leader in memory chips invests significantly to try to catch up with the Taiwanese semiconductor manufacturing business in logic chips, a partnership with Arm could be ideal for Samsung.
The South Korean corporation is nevertheless constrained by technical issues in key areas like Arm’s specialty of application processor architecture.
Intel, whose CEO Pat Gelsinger expressed interest in forming a consortium to purchase the chip designer in February, is one of the additional prospective arm suitors.
According to the Yonhap news agency, Samsung rival SK Hynix has also indicated interest in Arm. Vice Chairman Park Jung-ho was quoted as saying in March that the chipmaker was thinking about assembling a team to acquire Arm. At the time, the business declared that the remark did not pertain to a specific strategy.
Arm is suing Qualcomm Inc., which has also been mentioned as a potential investor, alleging trademark infringement and violation of licence agreements.
In a note to clients, Redex Research analyst Kirk Budry warned that the argument might overshadow the arm IPO.
For a premium valuation, “Arm probably needs all of its clients,” he said.