Expected proceeds of billions
Chip designer Arm applies for IPO
8/22/2023 1:24 am
The mega IPO had been expected for a long time: now the chip designer Arm has officially submitted its prospectus. However, there is still no information on the volume and price of the share placement.
The chip designer Arm, whose technology is found in practically all smartphones, makes its IPO official. The company, which belongs to the Japanese technology group Softbank, has now published its stock exchange prospectus. The document initially gave no information on the volume and price of the arm share placement on the Nasdaq technology exchange. However, it is expected to be the largest IPO of the year in the US.
The stock exchange prospectus shows, among other things, that the arm business yields stable profits. In the past fiscal year ended March, Arm made a profit of $524 million on sales of around $2.68 billion. In the previous fiscal year, it had been a profit of $549 million on sales of around $2.7 billion.
Basis not only for smartphone chips
Apple and Samsung, among others, are developing the processors for their smartphones based on the chip architectures designed by Arm. The semiconductor company Qualcomm, whose chips power many Android phones, also uses it. The companies pay royalties to Arm for using the chip architectures. The arm designs prevailed in smartphones against chip systems from Intel – partly because they use less power. Now chips based on Arm architectures are also used in data centers, and Apple uses them in its Mac computers.
Softbank bought British firm Arm for $32 billion in 2016. A sale to the chip group Nvidia failed last year due to concerns from competition watchdogs. Then the IPO was decided. Softbank intends to retain a majority interest in Arm after the share placement.
According to information from the financial service Bloomberg, Softbank was considering a total valuation of $60 billion to $70 billion for Arm for the IPO. Originally, a proceeds of eight to ten billion dollars were targeted – but the income could be lower because Softbank wanted to keep a larger stake, it said.