Chip company Arm is aiming for a stock market valuation of up to $55 billion

2023-09-03 17:12:17

The British computer chip design company Arm is aiming for a valuation of 50 to 55 billion dollars through its IPO in the United States, according to a press report. This would make the IPO the biggest this year. Arm wants to meet with investors on Tuesday, the Wall Street Journal reported over the weekend, citing people familiar with the matter. The IPO should take place the following week.

Arm will offer about ten percent of all shares on the market, the report said. According to the Reuters news agency, the company wants to get $47 to $51 per share from investors.

Arm’s technology is found in virtually all smartphones. The stock exchange prospectus published last week shows, among other things, that the business is making stable profits. In the last financial year ended March, Arm made a profit of 524 million dollars on sales of around 2.68 billion dollars (2.46 billion euros). In the previous fiscal year, it had been a profit of $549 million on sales of around $2.7 billion.

Apple also uses them for Mac computers

Apple and Samsung, among others, are developing the processors for their smartphones based on the chip architectures designed by Arm. The semiconductor company Qualcomm, whose chips power many Android phones, also uses it. Companies pay ARM royalties for using the chip architectures.

The arm designs prevailed in smartphones and tablet computers against chip systems from Intel – partly because they use less power. Now chips based on Arm architectures are also used in data centers, and Apple uses them in its Mac computers.

Roland Lindner, New York Published/Updated: , Recommendations: 3 Alexander Wulfers Published/Updated: , Recommendations: 25 Marcus Theurer Published/Updated: , Recommendations: 15

In terms of risk factors, Arm devoted a lot of space to business in China in the prospectus. A quarter of ARM’s proceeds came from the world’s largest smartphone market last year. The licenses for Arm’s chip designs are sold there by the company Arm China, in which Chinese investors hold a majority of 52 percent. Arm owns just 10 percent of the Softbank subsidiary, which controls the rest of the shares. Arm sees risks for the business both in this structure and in the technology competition between Beijing and Washington. Some powerful Arm chips are already affected by US restrictions on exports to China.

The Japanese Softbank had bought the British company Arm in 2016 for $32 billion and delisted it. A sale to the chip group Nvidia failed last year due to concerns from competition watchdogs and arm customers. Then the IPO was decided. Softbank intends to retain a majority interest in Arm after the share placement.