Samsung Electronics' big move! Targeting these two giants? How much do you know about supporting shielding conductive absorbing materials

According to sources cited by South Korean media Business Korea, it is expected that Samsung Electronics will announce a large-scale merger and acquisition (M&A) deal in the near future. As the company hopes to strengthen its non memory business, German chip giant Infineon and Dutch semiconductor company NXP Semiconductors have become targets of speculation.

Han Zhongxi, Deputy Director of Samsung Electronics' Digital Business Unit, stated at CES 2022 about the possibility of mergers and acquisitions (M&A): "If we can complete the M&A transaction faster, we will choose them instead of going it alone. I think there will be good news soon." Whether Samsung will conduct another global M&A after acquiring Harman in 2016 has attracted much attention from the business community.

Samsung Electronics Vice President (DX Head) held a press conference in Las Vegas, USA (Image source: Asia Daily)

Samsung Electronics targets automotive semiconductors

Samsung Electronics is currently the world's largest storage chip manufacturer and the second largest chip foundry after TSMC. Therefore, foreign media also mentioned in their reports that Samsung Electronics' large-scale acquisition targets will be companies in the non storage chip field, with the aim of promoting the development of the non storage chip business.

In 2017, Samsung Electronics launched universal flash memory for automobiles and later provided the automotive processor "Exynos Auto 8890" to German automaker Audi. The company also provided the "Exynos Auto V9" to Hyundai Motor in 2019. Since the end of last year, high-performance solid-state drives (SSDs) and graphics DRAM have been provided to overseas car manufacturers.

At the beginning of 2021, Samsung Electronics announced that it would drive meaningful mergers and acquisitions within three years. Foreign media narrowed down the scope of Samsung Electronics' acquisition targets, believing that they would acquire companies in the automotive semiconductor field to enhance their strength in this field. The potential acquisition targets given at the time were mainly in the automotive semiconductor field.

Samsung Electronics is optimistic about automotive chips because the industry has growth potential. According to market research companies, the size of the automotive chip market is expected to grow from $38 billion to $67.6 billion from 2020 to 2026, and the total price of chips per vehicle is estimated to increase from around $400 in 2018 to over $1000 between 2018 and 2024.

The two major acquisition targets of Infineon and NXP, as reported by foreign media in the latest report, are both related to automotive semiconductors. The former provides micro control units for car manufacturers, while the latter provides power management integrated circuits.

(Source: United News)

Acquiring NXP is not an easy task

Even if Samsung Electronics only acquires any of them, it will still be a large-scale merger and acquisition transaction. Among them, NXP has been mentioned as the most likely company to be acquired by Samsung Electronics in recent years.

Currently, NXP has production lines in Arizona and Texas in the United States, and Samsung Electronics also has production lines in these two locations. NXP is a leader in the automotive semiconductor industry, including application processors, information entertainment, and microcontroller unit segments. Until Infineon Technologies acquired Cypress Semiconductor in 2018, the company had the highest market share in the global market. In 2020, it was the second largest company in the industry.

In fact, Samsung Electronics had considered acquiring NXP in 2019, but ultimately failed due to disagreements over the acquisition price. In April 2021, the US securities industry once again reported acquisition news.

In addition, NXP was once a target for Qualcomm's acquisition. In 2016, Qualcomm reached a $38 billion acquisition agreement with NXP, which was later increased to $44 billion. However, the final acquisition transaction did not materialize, and Qualcomm announced in July 2018 that it would abandon the acquisition. They paid NXP a $2 billion "breakup fee" for this.