TOKYO/SEOUL SoftBank Group Corp’s CEO and founder Masayoshi Son told reporters on Thursday that he will meet together with Samsung Electronics (OTC: SSNLF) to discuss a possible “strategic alliance” between the South Korean tech giant and chip maker Arm.
The billionaire is scheduled to make his first trip to Seoul within three years. “I’d like to talk with Samsung (KS: 005930) about a strategic alliance with Arm,” Son stated in a statement.
The announcement follows comments made from Samsung’s vice chairman Jay Y. Lee, who was quoted via newswire News1 the Son “may make a proposal” regarding a trip planned for in the coming month. Samsung did not respond to the news report.
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SoftBank purchased Arm which is the company that is the basis of Apple (NASDAQ: AAPL)’s iPhone and a majority of other mobile phones, in 2016 at a cost of $32 billion. A second proposal for the sale of Arm the company to Nvidia (NASDAQ: NVDA) caused a backlash from the industry and stalled on the regulatory hurdles that prompted SoftBank to present plans to launch the U.S. list of its firm based in Cambridge.
The visit is accompanied by speculation regarding the possible creation of an industry group to put money into Arm and guarantee 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,” Lee Min-hee, the analyst of BNK Investment and 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 major concern for the executives of the tech conglomerate SoftBank that has posted an enormous loss in the Vision Fund investment arm and reduced its share of Alibaba (NYSE: BABA) Group Holding to get cash.
An attempt to market the chip manufacturer however, are amidst an eerily low in deal-making, with markets volatile because of the rising rates of interest and Russia’s invasion of Ukraine. In the meantime, the Philadelphia SE Semiconductor Index is down around 1/3 over the course of the year.
A partnership to Arm may be a great strategic match with Samsung because it’s the leading memory manufacturer. has invested massively to keep the pace of Taiwan Semiconductor Manufacturing Co in logic chips.
It is believed that the South Korean conglomerate is still considered to be hampered by technical limitations of the initial technology for non-memory chips , such as application processors, which Arm has a specialization in.
Other potential Arm suitors are Intel Corp (NASDAQ: INTC) which has chief executive Pat Gelsinger in February expressed an interest in joining an agreement to purchase the designer of the chip.
Samsung competitor SK Hynix has also expressed an interest in Arm according to Yonhap media agency. The agency reported vice chairman Park Jung-ho declaring on March 1 that the company was looking at the formation of a consortium to purchase Arm. The company claimed that at the time, the statement did not pertain to any specific plan.
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Qualcomm (NASDAQ: QCOM) Inc which has also been identified as a possible investor is currently under investigation by Arm who accuse it of violating license agreements and trademark infringement.
The conflict can cast a shadow on any Arm list, Redex Research analyst Kirk Boodry wrote in a letter to customers.
“Arm probably needs all its customers onside to command a premium valuation,” said the analyst. stated.
