Chip designer Arm’s US IPO is expected to bring in up to $4.9 billion for Japanese owner Softbank.
In what is probably the world’s largest IPO of the year, the British chip designer Arm is aiming for a company valuation of 52 billion dollars.
According to the listing documents released on Tuesday, the previous owner, Softbank, is offering 95.5 million ARM shares, about nine percent of the company’s capital stock, at a price of $47 to $51 per share. This results in an issue volume of up to 4.87 billion euros.
The offer period is expected to run until September 13th. The arm’s debut on the US technology exchange Nasdaq is scheduled for the following day. According to insiders, the subscription range could be increased by then if demand develops strongly. In addition, numerous technology groups that are ARM customers wanted to participate in the chip designer, at least with comparatively small amounts, in order to secure further cooperation. According to the information, Softbank will hold almost 91 percent of Arm after the IPO.
Arm was founded 33 years ago as a joint venture between Acorn Computers, Apple and VLSI Technology. Almost all smartphone processors are based on the company’s design. The company, which is based in Cambridge, UK, was listed on the stock exchange – then in London and on Nasdaq – from 1998 to 2016 before Softbank acquired it for $32 billion. A few days ago, the technology investor bought up the remaining ARM shares held by one of its funds. As part of this transaction, Arm was valued at $64 billion.
Tech companies interested in arm shares
Tech investor Softbank is driving Arm’s IPO.
Leading technology companies also want to be present at what is expected to be the world’s largest debut of the year on Wall Street, which is expected to cost almost five billion dollars, in order to prevent the competition from gaining competitive advantages. Because the processors of practically all smartphones are based on the designs of the chip designer Arm.
In recent months, ARM has been in talks with about ten companies about getting involved. These included Amazon, Alphabet and NVIDIA. Below is an overview of possible future major shareholders of Arm.
alphabet
The cloud division of the Internet subsidiary Google also relies on its own chips, which are developed with the help of Arm. These are used, among other things, for artificial intelligence (AI).
Amazon
The online retailer’s cloud division, AWS, produces its own special processor based on an Arm design. According to an insider, after initial interest, Amazon has changed its mind.
Apple
The iPhone supplier Apple also uses ARM designs for chips in its products.
intel
The contract manufacturing division of the semiconductor manufacturer announced a cooperation with Arm in spring 2023. In the future, smartphone chips designed by Arm will also be produced in Intel factories.
NVIDIA
The group, known as a graphics card specialist, tried in vain to take over Arm completely in 2022. The NVIDIA “Grace” processor developed for data centers is said to be based on Arm designs.
Samsung
The South Korean electronics group also uses ARM technology for its chips. In autumn 2022, Softbank announced that it wanted to talk to Samsung about an alliance with the chip designer.
TSMC
The world’s largest contract chip manufacturer from Taiwan is working together with Arm to develop tailor-made processors for its customers. These are then used in smartphones or data centers.
NEW YORK (dpa-AFX)/(Reuters)
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