Summary:
- UK chip designer ARM, owned by SoftBank, files for an IPO.
- ARM's chip designs are widely used in smartphones, Apple laptops, and some Windows machines.
- This IPO attempt comes after a failed deal to sell ARM to Nvidia.
- ARM's stock market launch is expected to boost a lackluster IPO market.
- The move could also increase SoftBank's funds for further investments, particularly in AI.
- ARM, founded in 1990, was publicly listed until 2016 when SoftBank took it private.
- Despite a slump in the smartphone market, ARM reports only a 1% drop in annual revenue.
- ARM's expansion into cloud computing and other sectors has been successful.
- The company aims for a valuation between $60 billion and $70 billion on NASDAQ.
UK chip designer ARM, known for its ubiquitous chip designs in smartphones, Apple laptops, and select Windows machines, has filed for an initial public offering (IPO). This move comes after a failed attempt by US chipmaker Nvidia to acquire ARM, which was thwarted by the US Federal Trade Commission. ARM's upcoming IPO is poised to invigorate a lackluster IPO market that has seen multiple high-profile startups delay their listings due to market volatility. Additionally, the IPO could bolster SoftBank's financial resources, aligning with CEO Masayoshi Son's ambition to invest more in artificial intelligence. Established in 1990, ARM was publicly traded until 2016 when it was privatized by SoftBank.
Despite the smartphone market experiencing a significant downturn, with projections indicating a decade-low, ARM remains resilient, reporting only a 1% decline in annual revenue. This suggests that ARM is weathering the industry's challenges relatively well, possibly due to an increase in per-chip rates. Beyond its stronghold in device chip designs, ARM is expanding into thriving sectors, having garnered a 10% market share in cloud computing for networking and server chips. The company's recent valuation stands at $64 billion, though some industry experts argue that this figure may be inflated. SoftBank's plans include seeking a valuation ranging between $60 billion and $70 billion for ARM's listing on the NASDAQ.
ARM's decision to go public again comes at a critical juncture, as it strives to maintain its dominance in chip designs amid a challenging smartphone market. With its foray into cloud computing and other sectors showing promise, the IPO is expected to draw significant attention from investors. SoftBank's valuation aspirations reflect its confidence in ARM's potential to thrive in an evolving tech landscape. The listing could potentially provide SoftBank with the resources needed to fuel its ambitions in artificial intelligence and other cutting-edge technologies.