Samsung Probably Won't Be Snapping Up Chip Designer Arm – Analyst

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Some speculation has arisen over whether Samsung will purchase chipset design firm Arm but that reportedly won't be happening. Or at least it won't according to Objective Analysis analyst Jim Handy. The analyst points to several key factors that will likely sway Samsung away from the purchase.

If Samsung purchases Arm, that will give it a fabless microarchitecture design company and the means to produce its own cores and chips based on those designs. It would be a big step forward that could turn out to be a boon to its pursuits. That's if the company chooses to go that route, which is unlikely according to the recent analysis.

What is Arm and why won't Samsung buy?

Arm, as noted above, is a chip design firm. More accurately, it's a fabless semiconductor and software design company. Most prominently, it's behind the ARM Cortex-branded designs that are most often found at the core of Qualcomm's Snapdragon chips, among others. Summarily, Arm licenses its designs out to others. And that's the first problem, according to reports citing Mr. Handy.

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Samsung does not license its designs but builds its own chips and cores based on licensed designs. Those are the "Mongoose"-branded cores used in its Exynos chipsets. So buying out a company that's largely used by others for designs wouldn't make a lot of sense in terms of the internal company philosophy.

The other problem is price, Mr. Handy notes. The merger and acquisition deal could end up costing Samsung well over $40 billion. For comparison, the recent T-Mobile merger with Sprint cost T-Mobile roughly $26 billion. And the Google buyout of HTC IP and engineers cost the search giant right around $1 billion. Those deals arguably brought more to their respective participants than the $40 billion or more acquisition would bring Samsung.

So is it completely out of the question?

Now, however unlikely, Samsung probably shouldn't be taken out of the running just yet. The South Korean tech giant has been actively pursuing a place among leading chipmakers. More specifically, the company has pushed hard to gain superiority over competitor TSMC. Especially when it comes to advancing chip technology forward. It failed to do so in terms of the 7nm process and the 5nm process. But it hasn't given that up yet.

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Recent reports on Samsung's goals indicate that it may actually attempt to skip over the upcoming 4nm process presently in pursuit at TSMC. The purpose of that, reports indicate, is to arrive at a 3nm process first.