Korean chaebol Samsung Group's de-facto head Mr. Lee Jae-yong is set to visit Europe for a two-week trip speculated by many to be part of the company's effort to use its financial strength to limit its primary chipmaking rival the Taiwan Semiconductor Manufacturing Company (TSMC). Samsung and TSMC are the only two companies in the world that manufacture high end semiconductor products, and the latter is in a dominant position worldwide due to its large orders and stable progress.
Samsung, on the other hand, has suffered from yield problems with its advanced technologies, and Mr. Lee will visit Dutch equipment manufacturer ASML as part of his visit believes the Korean media. Additionally, while Samsung is keeping mum on an apparent second reason for the visit, the press also believes that the company is interested in acquiring NXP Semiconductors.
Samsung Chief's European Visit Comes As Company Commits $355 Billion To Develop Chipmaking and Other Businesses
Speculation about the executive flying off to The Netherlands to visit ASML started earlier this month when Mr. Lee asked the court to excuse him from his hearings scheduled in mid-June due to a Dutch trip. When combined with Samsung's recent $355 billion announcements that also outlined plans to acquire more advanced Extreme Ultraviolet (EUV) chipmaking machines, the Korean press was rife with speculation about the reasons behind the Samsung chief's travel plans.
These machines are the most advanced in the world and they are responsible for using ultraviolet light to print billions of tiny circuits on a piece of silicon to create what is called a modern-day semiconductor. ASML is the only company that builds them, and TSMC, Samsung's rival in the contract chip manufacturing space has access to most of these machines, according to statistics that it shared a year back.
U.S chip giant Intel Corporation, the world's largest chip manufacturer, is also stepping up its efforts to acquire the machines. Intel, and likely both TSMC and Samsung as well, is focusing on machines dubbed as High-NA. These machines use a larger lens which then enables better circuit printing resolution and avoids defects that invariably arise due to the intricate nature of chip manufacturing.
While Mr. Lee did not respond to questions regarding his trips or if he will also focus on acquisitions, the industry believes that Samsung might be interested in acquiring the Dutch semiconductor firm NXP. NXP is an important copny whose products are present in several products ranging from consumer electronics to vehicles.
The Taiwanese press believes that by acquiring NXP, Samsung stands to gain a strategic advantage over TSMC. However, the Korean press has also mentioned NXP, with a report that surfaced in October last year claiming that not only NXP, but Texas Instruments, Infineon Technologies, ST Microelectronics and Rennaisance Technologies are also on the Korean chaebol's radar.
Autmotive chipakers, such as NXP, were thrown into renwed spotlight last year as a global chip shortage disrupted vehicle manufacturing all over. Reeling from the pandemic, automakers set conservative demand forecasts, and then were caught off guard when markets, particularly China, rapidly recovered. Mr. Lee will spend a little over a week outside Korean and his trip also includes visits to Germany and France.
South Korea is one of ASML's largest markets and accounts for more than one third of the equipment manufacturer's revenue. The company will also invest millions of dollars in the country and expand its facilities for maintaining the EUV machines.
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