Samsung's M&A target list draws market attention

(Yonhap)

All eyes are on what companies would be on the shopping list of Samsung Electronics, after the tech giant’s announcement last week captured the attention among industry officials and market watchers.　

Multiple chip-related companies have emerged as potential acquisition targets for the South Korean tech giant, according to market watchers.

Dominant speculation suggests that Samsung is likely to be looking for a company that is related to the automotive chip business, or one that is correlated with the foundry.

In 2019, after Samsung announced its system-on-chip growth plan, three fabless firms were rumored to be on Samsung’s list: NXP, Xilinx and Infineon.

Xilinx is known for its field-programmable gate array technology used for various 5G chips, and NXP and Infineon are automotive chip developers.

While Xilinx was acquired by AMD last year, NXP is still available in the market after Qualcomm failed to take it over.

Some news reports say that Samsung had conducted due diligence on the Netherlands-based NXP at the time, and considers NXP as a strong contender for Samsung’s acquisition.

NXP has a strong business portfolio of automotive application processors and infotainment solutions, which could be a chief reason why Samsung has its eye on it.

Considering that Samsung could not announce a notable achievement of its subsidiary Harman after acquiring it in 2016, the company might be mulling measures to create synergy with Harman in the first place.

Some market watchers have also mentioned Texas-based TI and Japan’s Renesas as possible targets.

While TI is specialized in manufacturing high-voltage chips, which is essential for automotive chips, Renesas is one of the leaders in the micro control unit market, another key area in the automotive chip field.

Experts say that acquiring an automotive chip company would propel Samsung to a higher tier supplier for traditional automakers who are relatively conservative in selecting outside suppliers.

However, some also expect Samsung could be eyeing the foundry market.

In order to catch up with foundry leader TSMC, it is crucial for Samsung to expand its foundry infrastructure and capacity.

“Companies like GlobalFoundries could still be on Samsung’s mind,” an industry insider said.

“Samsung has said it has prepared for M&A for a long time, and this means that it is ready to take over,” another source said. “However, the company’s M&A plans are carried out confidentially 100 percent on its own.”

By Song Su-hyun (song@heraldcorp.com)

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