In its Q4 2020 earnings call, Samsung Electronics Co. has stated that the company will push for more mergers and acquisitions. The South Korean tech giant confirmed that they will actively use their cash reserves to expand investments in key growth areas.
Incidentally, for Samsung, these key growth areas are related to its semiconductor and chip manufacturing business. Samsung's Chief Finance Officer, Choi Yoon-ho, has said that the company is actively evaluating mergers & acquisitions at this stage.
The South Korean tech giant expects to positively close significant acquisitions in the next three years.
In fact, Samsung last acquired Harman International Industries for USD 8 billion in 2016. This was Samsung's last major acquisition.
Industry experts opine that Samsung would shore up acquisitions in its semiconductor business. Unsurprisingly, Samsung's competitors have made large semiconductor acquisitions last year.
A case in point being NVidia Corp., which took over chip and processor design firm ARM Holdings for USD 40 billion. NVidia has also acquired US chip manufacturer Advanced Micro Devices Inc.'s Xilinx Inc. for USD 35 billion.
SK Hynix Inc., another Samsung competitor, had acquired Intel Corp.'s NAND business last year. The deal size was roughly USD 9 billion.
Samsung's plan to increase its strengths in the chip manufacturing and foundry business is nothing new. As a matter of fact, Samsung had announced its plans to boost its competitiveness in chip and semiconductor manufacturing in 2019 itself.
Samsung had then declared its ambition to become the world leader in logic chip manufacturing by 2030. The South Korean giant had declared plans to invest 133 trillion won towards this ambition.
Samsung Pushing Acquisitions And To Set Up Chip Production Facility in the US.
Various media reports had cited Samsun's ambition to build a chip manufacturing plant in the US.
An earlier report had cited that Samsung was evaluating to build a chip manufacturing plant in Austin, Texas. The estimated investment for this venture was pegged at USD 10 billion. This new plant was expected to fabricate semiconductors with 3nm technology.
However, in its Q4 2020 earnings call, Samsung has not accepted to any firm plans for a chip manufacturing plant in Austin. Though, the company did accept that they are always looking at options to expand their manufacturing capabilities.
Samsung has also confirmed that they will increase their capital expenditure over these next three years. In fact, last year itself Samsung has increased spending in both their semiconductor business as well as their display manufacturing business.