Now Hear This!

What was the last major acquisition Samsung made? Scratching my head and Zibb searching EDN.com, I move to Google and am still not finding anything big that’s recent.

Rumor had it last year that Samsung was looking at buying Micron. Now rumor has it, the South Korean electronics giant wants to buy SanDisk. (See “Possible Samsung acquisition of SanDisk viewed as positive.”)

The reports come after the Milpitas, Calif-based memory maker suffered the type of June quarter companies like to forget. Oversupply forced flash prices down even further in Q2 and saw SanDisk report a loss, a slide in revenues, and production ramp and investment delays at two of its fabs.

SanDisk’s stock, SNDK, has also been hit. SNDK slid pretty steadily from $33.10 on May 15 to Thursday’s $13.46 close. Today’s reports helped, driving SNDK up more than 31% to close at $17.64, but it’s still trading low.

SanDisk’s stock isn’t the only one hurting. The Philadelphia Stock Exchange Semiconductor Sector Index (an index of 19 large semiconductor stocks, for the non-biz readers out there) fell Thursday to its lowest level in more than five years.

When considering long-term potential, like one analyst considered when reporting on MEMC earlier this week, plenty of good stocks are going for bargain basement prices. And as share prices continue to drop in the chip sector and the overall market, Samsung may not be the only tech player exploring major acquisitions.

It’s doubtful that Samsung is, if the acquisition rumors are true, looking at SanDisk for its capacity. The deal would save Samsung the between $400 million and $500 million annual flash patents royalties that it pays SanDisk. Such a consolidation would also give Samsung more control over memory pricing, and could help dig flash out the flat-growth sludge pit it’s in this year. 

And, by the way, there were also more rumors this week that Idaho-based Micron is looking at Infineon-DRAM spin-off Qimonda. Qimonda’s stock, QI, was at $4.71 on June 12 and fell to $1.65 on August 4, only to rebound slightly on the reports to $2.10 today.

Both possible consolidations could encourage Wall Street to take another look at the semiconductor stocks they’ve been drudging down for most of the year.  (And before any one out there makes the accusation, no, I don’t own any tech stocks. It’s considered unethical for a journalist to hold stock in what they report on.)

What are your thoughts on the possible acquisitions and the semi industry’s suffering stocks? Voice your opinion below.

--Suzanne Deffree, Managing Editor, News