SoftBank and Samsung Elec discuss alliance in Arm, but not equity investment

South Korea’s Samsung Electronics vice chairman Jay Y. Lee has discussed a broad range of cooperation with Japan’s SoftBank founder and chief Masayoshi Son during his recent visit to Seoul, but whether their talks touched on specifics for a strategic alliance related to British chip design house Arm Holdings remains unclear.

According to the industry sources on Wednesday, Lee and Son held a meeting at Samsung Electronics’ building office in Seocho, Seoul, on Tuesday, joined by Samsung Electronics device solutions CEO Kyung Kye-hyun, Samsung Electronics mobile experience CEO Roh Tae-moon, and Arm CEO Rene Haas.

Son proposed a broad comprehensive alliance between Samsung and Arm during Tuesday’s meeting, but he fell short of proposing Samsung to make equity investment in Arm as a kind of a pre-IPO investment, according to sources.

Arm, a British semiconductor and software design company, possesses the key technology for semiconductor design such as processor IPs that power most smartphones including Samsung’s Galaxy phones and Apple’s iPhone. SoftBank and SoftBank’s investment arm Vision Fund each currently own a 75 percent and 25 percent stake in the company.

SoftBank is attempting a stake sale as it plans to cut at least 30 percent of its staff at Vision Fund after it posted steep quarterly losses.

SoftBank originally planned to sell Arm, which it acquired for $32 billion in 2016, for $40 billion to U.S. chip company Nvidia in 2020, but the deal ultimately fell through due to regulatory challenges.

While it is unlikely that Samsung will purchase a controlling stake in Arm due to monopoly concerns, there are speculations that it may form a consortium with SK and other companies to acquire or make a partial stake investment in Arm.

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