SK hynix Looking to Buy Arm

Article By : John Walko

SK hynix is reportedly considering forming a consortium to acquire UK-based chip design company Arm.

South Korean chips group SK Hynix is understood to be interested in buying Arm, in collaboration with other interested but unnamed parties.

ARM Headquarters
Arm headquarters in Cambridge, U.K.

News agency Yonhap reported earlier this week that the company’s vice-chairman, Park Jung-ho, said, “We are reviewing possibly forming a consortium, with strategic partners, to jointly acquiring it.” He added, “I don’t believe Arm is a company that could be bought by one company.”

The deal is said to be at the early stages.

Last year, Nvidia attempted to purchase the British chip designer, but the deal fell through after encountering numerous regulatory hurdles. And before that, the company’s owner, Japanese group Softbank, attempted an Initial Public Offering that would have been arguably the largest IPO in the semiconductors sector.

The same concerns that bedevilled the potential Nvidia deal are not pertinent with the South Korean group, which currently focuses on designing and making memory chips and recently entered the market for image sensors.

Nvidia, instead, was already a licensee of Arm’s processor designs.

The fact that SK Hynix is seeking to put together a consortium should ease any problems with antitrust issues.

Softbank was believed to be seeking $60 billion for Arm when it announced the IPO.

It is worth noting that Park, as well as being a senior executive at SK Hynix, is also the CEO at SK Square, a company that was spun out of SK Telecom specifically to seek acquisitions and mergers in the sector.

And of course, while there are no existing conflicts of interest in any deal, that could change in the future. For example, the South Korean chip giant recently announced a memory design that boasts processing capabilities, which could cause concerns of an overlap in the future.

And if the South Korean group  either SK Hynix or SK Square  were to acquire an Arm licensee, then again it is most likely that regulators would closely scrutinize any deal.

Earlier this week, antitrust regulators in South Korea approved the acquisition of local semiconductors maker Key Foundry, which focuses on chips for display drivers, power management devices, and microcontrollers. Currently, revenues at SK Hynix are almost entirely from sales of memory products.

This article was originally published on EE Times Europe.

 

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