Recently, the market has reported that NXP Semiconductors (NXP) may become a potential acquisition target for Samsung Electronics, as the latter is planning to expand the market related to automotive chips. However, JP Morgan pointed out that Samsung Electronics is more likely to consider acquiring an American automotive semiconductor company than NXP.

According to Juheng.com, the global chip shortage problem continues. At the beginning of this year, there was news that Samsung Electronics intends to propose mergers and acquisitions with automotive semiconductor manufacturers in order to gain more market share. In this regard, JP Morgan Chase pointed out in a report that Samsung Electronics is more likely to consider acquiring American automotive semiconductor companies than NXP, which is rumored in the market.

According to the report, Samsung Electronics currently has US$114 billion in cash on its balance sheet and less than US$20 billion in debt. About US$100 billion is enough to buy automotive semiconductor companies. Analyst JJ Park believes that Samsung Electronics will look for opportunities to acquire US automotive semiconductor companies, and NXP is not the only option.

Park pointed out in the report that potential targets for Samsung Electronics’ acquisitions may include Texas Instruments (TI), MICROCHIP TECHNOLOGY, and Analog Devices, while European automotive semiconductor companies such as STMicroelectronics or Infineon (Infineon) will not be the target of Samsung's acquisition.

The average market value of the six semiconductor companies mentioned above is US$68 billion (approximately KRW 76 trillion). As of the third quarter of 2020, the total cash held by Samsung Electronics is 116 trillion won.

Since the end of last year, global automakers have continued to be plagued by chip shortages. Major automakers around the world have successively announced production cuts and halts, and the auto market has been hazy. According to data from market research company IHS Markit, the shortage of automotive chips is likely to affect the production capacity of nearly 1 million light vehicles worldwide in the first quarter, which is higher than the previously estimated 672,000. Based on this background, Samsung intends to expand the market related to automotive chips.