Arm, the UK microchip behemoth, submits an application to offer shares in the United States

22 Aug, 2023

Arm, the UK microchip behemoth, submits an application to offer shares in the United States

Cambridge-based Arm, a company specializing in chip design for a wide range of devices including smartphones and game consoles, has filed a registration statement for an initial public offering (IPO) on New York's Nasdaq stock exchange, set to take place in September. While the exact number of shares and their pricing remain undisclosed, the anticipated IPO could mark one of the largest listings since late 2021. Arm's decision to list in the US comes after it chose not to go public in London, dealing a setback to the UK. The company aims for a valuation between $60 billion (£47 billion) and $70 billion.

Acquired by Japanese conglomerate Softbank in 2016 for £23.4 billion, Arm's chip designs are integral to companies like Apple, Samsung, and Taiwan Semiconductor Manufacturing Company. The IPO move signifies Arm's transformation from a private entity to a publicly traded one, allowing investors to buy and sell its shares on specified exchanges. The Nasdaq listing is expected to raise around $8 billion to $10 billion, joining the ranks of tech giants such as Google, Apple, and Facebook.

Although founded in 1990 and often referred to as the UK's technological gem, Arm declined Prime Minister Rishi Sunak's suggestion of a London Stock Exchange listing in favor of the US, citing it as the optimal path forward. This decision prompted discussions about the UK's attractiveness to tech IPOs in comparison to the US, known for higher profiles and valuations. Notably, Arm's CEO, Rene Haas, emphasized that the company will maintain its significant intellectual property, headquarters, and operations in the UK.

Despite challenging conditions in global financial markets due to factors such as Russia's invasion of Ukraine and the Covid pandemic, Softbank is pushing ahead with the multi-billion dollar IPO. The semiconductor industry, after grappling with supply shortages during the pandemic, has faced reduced demand, contributing to Arm's sales decrease to $2.68 billion in the year ending March 31. Moreover, sales for the three months ending June 30 experienced a 2.5% decline to $675 million.