Samsung-digital-city-in-suwon
Samsung Dicital City in Suwon, South Korea Courtesy of Samsung Electronics

Brisk sales of semiconductors in 2018 helped Samsung Electronics pile up its cash reserves amounting to almost $100 billion.

According to local media on Feb. 18, the company’s cash reserves stood at 104.2 trillion won as of the end of 2018, equivalent to $92.3 billion at current exchange rates.

The Seoul-based company saw the figure jump 20 percent through 2018 as it chalked up handsome revenue from chip sales. Samsung is the world’s largest maker of memory chips. In 2018 alone, the high-tech giant netted some $40 billion in profit.

In addition, its debts are negligible compared to its cash in hand _ the firm has less than $10 billion in liabilities.

Imminent M&A deals?

Now the question is what will Samsung do with this big chunk of cash.

The company has focused on research or investment in facilities such as plants for chips, mobile phones and flat-panel displays. It has not been aggressive in mergers and acquisitions (M&A).

But rumors are circulating that Samsung plans to shell out big money to acquire a foreign chip company this time around.

As targets of deep-pocketed Samsung, a few companies are on the lips of observers including NXP Semiconductors, Infineon Technologies and Xilinx.

Samsung track record

Under founder Lee Byung-chul and Chairman Lee Kun-hee, Samsung was reluctant to purchase other companies. Instead, Korea’s top company preferred organic growth.

Under the leadership of Vice Chairman Lee Jae-yong, however, Samsung seems to be a little different. In 2014, he took charge of Samsung Electronics instead of his bed-ridden father, Chairman Lee Kun-hee.

For example, the tech titan spent $8 billion to purchase Harman International Industries in 2016 as a part of efforts to secure a next-generation revenue source.

In addition, Samsung has turned to a few deals snapping up international companies in such segments as mobile payments and artificial intelligence.

Samsung Electronics is Korea’s largest company by any measure, well ahead of runners-up like Hyundai Motor and Hynix Semiconductor.