SoftBank meets with Samsung to discuss strategic alliance with Arm

Towards a strategic alliance between Arm and Samsung? After the unsuccessful acquisition of Arm by Nvidia, SoftBank is looking to do business with the leading microarchitecture company. A Japanese conglomerate considering an IPO could form a strategic alliance for this purpose. SoftBank founder and CEO Masayoshi Son said Wednesday (September 21, 2022) that he plans to meet with Samsung to discuss a “strategic alliance” between the Korean company and Arm, Reuters reported.

SoftBank is looking for money

“I would like to speak with Samsung about a strategic alliance with Arm,” Masayoshi Son said in a statement following a speech by Samsung Vice President Lee Jae-yong, who said Masayoshi Son might propose during her visit. Samsung declined to comment on the information.

An alliance with Arm could be a strategic asset for Samsung, both in fighting mobile SoC competitors like Qualcomm or Apple and in streamlining the manufacturing capacity of its Samsung Foundry subsidiary. It’s a leader in memory chips, but it can’t keep up with TSMC in advanced processors.

The visit comes amid speculation that an industry consortium could be set up to invest in Arm and ensure its neutrality. SoftBank bought Arm in 2016 for $32 billion. Since then, the Japanese conglomerate has wanted to sell the chip specialist to Nvidia. Acquisition that provoked protest from many industrialists and manufacturers of consumer electronics. After initiating investigations by various antitrust authorities, Nvidia finally abandoned the acquisition.

But SoftBank is looking for new money, especially from the losses of its investment arm Vision Fund, and wants to monetize Arm to save itself. However, Arm’s IPO ambitions come at a time when the value of the stock market, especially technology stocks, is falling due to the unfavorable macroeconomic context, the war in Ukraine.

Intel, Qualcomm, SK Hynix… interesting

An industrial alliance can be created to keep part of Arm, considered a strategic player in this sector. Pat Gelsinger, general manager of Intel, has already called for a consortium to buy Arm. Just like Qualcomm. But Arm sues the latter, accusing him of violating licensing and infringement agreements. Samsung competitor SK Hynix has also shown interest in the Arm.

“There has to be someone in the middle who acts as an intermediary to bring the various companies together in a consortium, and Masayochi Son may be trying to play such a role,” explained Lee Min-hee, an analyst at BNK Investment & Securities, from Reuters. “A potential suggestion would be that companies interested in owning part of Arm could participate in a pre-IPO offering at a lower price before IPO next year,” he added. Behind-the-scenes negotiations continue. Will the various players and competitors be able to come to an agreement?

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