The British chip maker Arm, owned by Softbank, intends to carry out its planned IPO on the New York Stock Exchange, a decision made against the backdrop of a race between the US, Europe and China to build their own semiconductor chip industries, according to a report in the Guardian.
Last year, Softbank canceled a plan to sell Arm to rival Nvidia, in the face of opposition from regulators due to concerns about the company’s dominance in designing chips for mobile phones. Softbank initially agreed to a price of 40 billion dollars, but at a certain point Softbank CEO Masiyoshi Sun estimated the value of the deal at about 80 billion dollars, following a jump in Nvidia’s stock price.
Sun planned the IPO as an alternative plan to the acquisition, and recently began a kind of road show in preparation for the IPO. However, so far the company has not announced where the offering will take place. According to the report in the Guardian, Softbank preferred an IPO in New York, where some of the largest technology companies in the world are traded, but the British government tried to convince the company to do an IPO in its home market (the London Stock Exchange), in addition to New York.
Choosing only New York is a blow to the financial position of the London Stock Exchange, this after other large British companies chose to issue in the US. “This is disappointing news for the London Stock Exchange and the legacy and future of the British semiconductor industry,” said Ross Shaw, founder of the Tech London Advocates group.
Arm’s chips have been dominating mobile phones for some time, and recently the company began working more with personal computers as well, challenging Intel’s dominance in the market.
A U.S. IPO is “the best way forward for the company and its stakeholders,” Arm CEO Rene Haas said. According to him, the company has been discussing the IPO with the British government and the Securities and Exchange Commission in recent months. Haas also added that the company intends to keep its headquarters in the United Kingdom, and intends to increase investments in the Kingdom by establishing a new complex in the city of Bristol and hiring additional employees. “We will continue to invest and own A role I serve in the British technology sector,” he concluded.