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Samsung reportedly in talks to acquire stakes in ARM in a bid race against Nvidia
By Chad Norton on August 4th, 2020 at 05:30pm - original article from game-debate

Last week it was reported that Nvidia is apparently interested in acquiring ARM, which would be one of the biggest deals in the semiconductor industry and notably sparked some regulator criticisms. But according to a recent report, Samsung are now interested in the ARM deal as well, but instead of outright buying the company, they’re looking to claim a small stake in shares instead in order to create a consortium between other similar semiconductor companies.

According to the report, Samsung are looking at a 3 to 5 percent stake in Arm, along with other semiconductor companies who are trying to work together to make sure no significant changes are made to the ARM architecture or licensing should Nvidia buy the whole company.

Samsung Electronics is considering acquiring a small stake in Arm, which will be between 3 percent and 5 percent,” said an industry professional, who wants to remain anonymous. “Arm will be acquired by a consortium led by multiple parties from the semiconductor industry given the complex nature of Arm's shareholding structure.

The deal is supposedly similar to one made by Samsung and other semiconductor companies with Dutch company ASML, where each company also owns a small stake in the business to keep one single company from owning the entire business. ASML is also the only supplier for the Extreme Ultraviolet (EUV) lithography equipment.

As seen in Samsung's previous equity purchasing in ASML, Samsung will likely try to acquire equities in Arm. As Samsung could solidify its partnership with ASML after the equity acquisition, Samsung expects it can reduce its licensing fee expenditure by securing equity in Arm,” the industry official explained again.

Whilst I would normally bash against an anonymous source as anything credible, given the recent backlash Nvidia has faced for regulatory scrutiny, the idea of other tech giants banding together to each have their own stake in the company is not exactly far-fetched. Plus, a stake in ARM would mean that Samsung could cut the costs of their ARM licensing and royalty fees, which would certainly be beneficial for investors.

Lastly, this kind of deal with Samsung and others could prove more favorable than Nvidia, as they would likely not be able to win the approval over numerous fair trade commissions in the US, EU, and East Asia. That, and SoftBank are reportedly looking to sell ARM at over $41 billion, and even though Nvidia is apparently in "advanced" talks already, it's unlikely the GPU maker will be able to put up the financial firepower all by themselves.

What do you think? Is this a better deal? Do you think Samsung (and others) could win over Nvidia? Let us know!