Samsung Electronics plans to actively adopt a merger and acquisition strategy in the next three years, focusing on the automotive semiconductor industry. This may be a major transaction following the acquisition of Harman.
Automotive semiconductors have huge growth potential. According to market research company Gartner, the value of semiconductors in a single car in 2018 was US$400, but by 2024, when autonomous vehicles become popular, the value of semiconductors is expected to exceed US$1,000. In view of the huge growth potential of the automotive chip business, and Samsung, as the world's largest memory chip manufacturer, lags behind in this field, mergers and acquisitions will be a way for it to quickly enhance its competitiveness.
According to a businessKorea report, NXP, Texas Instruments and Renesas Electronics are the most attractive acquisition targets. As early as 2019, Samsung Electronics has investigated NXP and TI, and there are rumors that Samsung has considered acquiring NXP. Based on NXP's outstanding technical capabilities in vehicle application processors (AP) and infotainment, it may have an effective synergy with Harman.
The other two companies also have advantages. TI has expertise in analog semiconductors and is committed to the production of key components for electric vehicles, namely high-voltage power semiconductors. Renesas is a leading manufacturer of MCU, which account for the largest proportion of the automotive semiconductor market, about 30%. In 2018, Renesas acquired a semiconductor design company IDT, thereby enhanced its capabilities in the field of autonomous driving semiconductors.
At present, the market value of Texas Instruments is 173.68 trillion won, NXP is 51.22 trillion won, and Renesas is 22.34 trillion won. Industry analysts predict that if it does acquire one of the aforementioned companies, Samsung will complete the largest transaction since the acquisition of Harman.
Due to the COVID-19 outbreak and rising demand for IT equipment chips, a shortage of automotive semiconductors has emerged. Automakers are facing unprecedented difficulties in chip supply and are beginning to cut production. In order to alleviate the shortage of automotive chips, TSMC decided to redeploy its production capacity.
There are also speculations in the industry that Samsung is paying attention to foundry manufacturers. In order to compete with TSMC, it is very important to expand foundry facilities and production capacity. Some people in the industry said that "companies such as GlobalFoundries Semiconductor may also be considered."