UK microchip giant Arm files to sell shares in US
UK microchip giant Arm files to sell shares in US
Cambridge-based Arm files papers to list in New York after opting against London, in a blow to the UK.
British microchip designing giant Arm has announced it has filed paperwork to sell its shares in the US.
The Cambridge-based company, which designs chips for devices from smartphones to game consoles, plans to list on New York's Nasdaq in September.
Arm did not reveal the number of shares for sale or the price, but its proposed initial public offering (IPO) could be the biggest listing this year.
In March, in a blow to the UK, the firm opted against listing shares in London.
On Monday, Arm announced that it had now publicly filed a registration statement relating to a proposed IPO. It said the number of shares to be offered and the price range for them were yet to be determined.
But the company is reportedly looking for a valuation of between $60bn (£47bn) to $70bn.
Arm was bought in 2016 by Japanese conglomerate Softbank in a deal worth £23.4bn. Prior to the takeover, it was listed in both London and New York for 18 years.
Its chip design instructions and technologies are used by manufacturers like the Taiwan Semiconductor Manufacturing Company and technology giants Apple and Samsung to make their own chips.
Listing a firm on a stock exchange takes it from being a private firm to a public company, with investors able to buy and sell shares of a company's stock on specific exchanges.
Reports previously suggested the firm had sought to raise between $8bn and $10bn through the listing on the technology-heavy Nasdaq platform. Other major technology companies including Google, Apple and Facebook trade on the Nasdaq. 2px presentational grey line
What is an IPO?
Private companies, as a way of raising cash, can start a process to list on a stock exchange.
In an IPO companies offer shares to investors before listing.
The price of the shares is typically set by investment banks hired by the company to run the process.
But once the shares start to be publicly traded, prices are set by supply and demand. The value of the shares, multiplied by how many there are, gives the market value of the company. 2px presentational grey line
Arm was founded in 1990 and has been referred to as the "crown jewel" of the UK's technology sector.
Reports in January said Prime Minister Rishi Sunak had restarted talks with Arm's owner about listing on the London Stock Exchange.
But the firm said it did not plan to pursue a UK listing, saying the US was "the best path forward".
The decision raised concerns that the UK market was not doing enough to attract tech company stock offerings, with US exchanges seen to offer higher profiles and valuations.
But Arm's chief executive Rene Haas has said the company will keep its material intellectual property, headquarters and operations in the UK.
The latest filing shows further intent that Softbank is pushing ahead with the multi-billion dollar sale despite difficult conditions in the global financial markets.
The number of stock market listings has fallen sharply since Russia's invasion of Ukraine. Shares in major technology companies have also fallen in the wake of the Covid pandemic.
After an acute shortage of semiconductors during the pandemic, the chip-making industry has faced reduced demand.
Arm's sales declined to $2.68bn in the year ended 31 March, hurt by a slump in global smartphone shipments. Sales for the three months to 30 June fell 2.5% to $675m.
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I guess this is their final move of desperation. It will help inflate value for a while at least which will buy Samsung and Apple a bit of time. I still think they might be too late to the plate though. We'll see
Are they really desperate?
They are still the leader with a big margin if I'm not mistaken.
Yeah I don't know if you have been following what's going on with ARM but they have been liquidating like crazy for the past year or more. With everyone investing and developing for Risc-v, including one of the largest ARM CPU manufacturers Qualcomm. That leaves Samsung and Apple in the lurch as they are both ARM dependent and were late to joining Risc-V. Just last week they both pushed $40m into ARM to keep it's value up.
I wasn't aware of that, good to know.
Does it really matter for Apple if Arm folds? They will just continue do their own thing, since they control the hardware and software stack. Like what they did with PowerVR they just copied the designs into their own GPUs design. I bet that is going to happen with the Arm designs. They will just turn it into Apple RISC Machines.
Does it really matter for Apple if Arm folds?
Yes. They've gone all in on ARM. Having to scramble to do a complex migration from ARM would not only be embarrassing for Apple, but majorly fragmenting for their userbase as well. Architecture moves take time and planning to do right, both of which would get compromised if ARM folded
The one thing Apple has always been really good at is picking dying architecture for their hardware. If Apple uses it, the hardware is practically doomed. (6502/68k/power PC/ARM)
I assume shifting their hardware manufacturing to a new spec might be costly, plus they might have some long term licensing agreement that has locked them into proprietary ARM for years. Either way, it'd be best for Apple if competitors hardware/software continued to be aligned as closely as possible with their own.
Note: I know dick about fuck when it comes to the computer hardware industry.
It means a great deal for their market value and hardware reputation. With Risc-V having so many benefits over ARM, especially when looking at core footprint, licensing costs, capable efficiencies, more capable instructions (Risc-V can do division) and manufacturers having so much more flexibility in design and manufacturing the market stands to pass them by rather quickly. Apple doesn't own ARM, they only license it, even if they did own ARM they would still not benefit much because there is a huge amount of reverse work to be done to get it to stay competitive 5-10 years down the line. This is already something Apple is aware of which is why they have already started investing into Risc