At its annual shareholder meeting, SK Hynix stated that it is considering acquiring Arm with the help of strategic partners. Because the concept is still in its early stages of development, it’s unknown whether SK Hynix will be able to pull it off before Am’s initial public offering (IPO). Meanwhile, Arm is planning to sell off its Arm China shares to accelerate its IPO.
The arm is a huge corporation that makes general-purpose CPUs and GPUs for smartphones, tablets, PCs, and a variety of other gadgets. Because SK Hynix offers a lot of DRAM and NAND memory for mobile electronics, Arm is a strategic partner for the company. Indeed, Park Jung-SK ho’s Square, an investment spinoff of SK Telecom, is looking forward to gaining control of Arm.
While supplying memory for Arm-based devices is crucial to SK Hynix, the company may be interested in Arm for another reason: SK Hynix has been attempting to resurrect its foundry business for years, as creating logic chips for others is more profitable than making commodity items such as 3D NAND or DRAM.
Antitrust officials in South Korea authorized SK Hynix’s acquisition of local chipmaker Key Foundry earlier this week, marking another step toward SK Hynix becoming a contract chipmaker. The corporation, on the other hand, is not going to stop there. A strategy is in the works to create a presence in Silicon Valley to develop relationships with fabless chip designers. It will be considerably easier for SK Hynix to do so now that Arm is under its hands.
SK Hynix is one of the corporations that frequently join consortiums to purchase key properties. For example, the firm owns a share in Kioxia, a competitor. However, outside of JEDEC and other industry bodies, the corporation does not engage with Kioxia on technological development. As a result, with Kioxia, SK Hynix is attempting to profit from its investments rather than seeking strategic gains. The concept with Arm appears to be a little different.
Softbank, Arm’s present owner, intends to list the company on the public exchange by next year. However, there is a flaw: Arm does not entirely control its Arm China branch (it holds a 47.33 percent interest), which accounts for almost a quarter of the company’s sales. Because Arm China does not report its financial results to the parent business, it is unable to share them with potential Arm investors, causing the IPO to be delayed. The arm is reportedly considering selling its Arm China interest to SoftBank and going public without one of its core business segments, according to the Financial Times, citing two persons familiar with the situation.
It’s worth noting that Arm China intends to go public in a few years. It will be significantly easier for Arm China to list on the stock market in 2026 or later if Arm Ltd. transfers its Arm China holding to SoftBank. SoftBank or Arm itself might buy shares of Arm China if they become available on the open market, regaining control of the rogue business unit.
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