SoftBank plans to list Arm in the US
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Arm, the chipmaker of Japanese SoftBank, filed for a listing on the Nasdaq on Monday, positioning itself for the IPO during a historically weak period for tech IPOs.
The company intends to trade under the ticker symbol “ARM”.
According to the filing, Arm reported net income of $524 million on sales of $2.68 billion for fiscal 2023, which ended in March. Arm's sales in 2023 were slightly below the company's 2022 sales of $2.7 billion.
The UK-based company confidentially applied for a US listing earlier this year after earlier announcing it would be listing in the US instead of the UK, dealing a blow to the London Stock Exchange.
Arm is one of the most important chip companies. It licenses an instruction set that is at the heart of almost all mobile chips and, increasingly, PC and server chips. In recent years, the goal has been to sell more complete chip designs, which is more lucrative.
According to the filing, ARM chips are made by companies including Amazon, Alphabet, AMD, Intel, Nvidia, Qualcomm, and Samsung. Its technology is also in Apple's chips for iPhones. Arm said its technology is in over 30 billion chips shipped in fiscal 2023.
Originally, SoftBank wanted to sell Arm to the chip giant Nvidia, but the deal faced stiff opposition from regulators, who raised concerns about competition and national security. SoftBank privatized Arm in 2016 in a $32 billion deal.
Arm hasn't provided a forecast share price, so it's not yet possible to estimate valuation.
Arm plays a central role in the consumer electronics world, designing the architecture of chips found in 99% of all smartphones, making the company a major technology player Apple, Google And Qualcomm.
However, the company also faces headwinds from slowing demand for products like smartphones, which is hitting chip companies across the board. Arm's net sales fell 4.6% year over year in the second quarter while the unit posted a loss, according to SoftBank's earnings release. SoftBanks' struggling Vision Fund, meanwhile, has racked up billions of dollars in losses lately as tech bets failed in a high-yield environment.
Arm argued in his filing that his technology is critical to AI applications, although the focus is on CPUs rather than the GPUs required for large AI models. “The CPU is critical in all AI systems, whether it handles the AI workload entirely or in combination with a co-processor such as a GPU or an NPU,” Arm said in the filing.
Arm is poised to enter the market at a time when investors are flocking to next-generation semiconductors due to artificial intelligence-driven demand, and particularly the rising popularity of generative AI applications. Nvidia, the chipmaker hardest hit by the generative AI boom, has seen its share price triple this year.
However, the technology IPO market has been largely dormant for the past 20 months and there have been no significant venture capital deals since December 2021. Last October intel spun off self-driving car technology company Mobileye. The share is up just 17% since the first day of trading.
Some tech investors may see ARM's offering as an indication of demand for new offerings. Grocery delivery service Instacart is one of the late-stage startups allegedly prepare Filing IPO filings with the SEC.
This is breaking news and will be updated.