{"id":51407,"date":"2023-08-22T03:14:49","date_gmt":"2023-08-22T07:14:49","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/chip-designer-arm-files-for-long-awaited-ipo-as-smaller-transistors-send-costs-skyrocketing\/"},"modified":"2023-08-22T03:14:51","modified_gmt":"2023-08-22T07:14:51","slug":"chip-designer-arm-files-for-long-awaited-ipo-as-smaller-transistors-send-costs-skyrocketing","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=51407","title":{"rendered":"Chip designer Arm files for long-awaited IPO, as smaller transistors send costs skyrocketing"},"content":{"rendered":"
\n

Arm Holdings Ltd. filed its long-awaited initial public offering late Monday, following last year\u2019s failed bid by Nvidia Corp. to acquire the U.K.-based chip architecture company.<\/p>\n

Arm has reportedly been seeking to raise $8 billion to $10 billion at a valuation of $60 billion to $70 billion, which would make its IPO the biggest of the year so far, and a number of large tech companies, including\u00a0Amazon.com Inc.
\n AMZN,
\n +1.10%<\/bg-quote>,<\/span>
\n \u00a0Intel Corp.
\n INTC,
\n +1.19%<\/bg-quote>
\n \u00a0and\u00a0Nvidia
\n NVDA,
\n +8.47%<\/bg-quote>,<\/span>
\n \u00a0are reportedly in the mix to be anchor investors.\u00a0<\/p>\n

\n

In a late Monday filing with the Securities and Exchange Commission, Arm said it was offering to list its U.S. traded shares on the Nasdaq under the ticker symbol \u201cARM.\u201d<\/p>\n

Arm, which is owned by Japan\u2019s SoftBank Group Corp.
\n 9984,
\n +1.40%<\/bg-quote>,<\/span>
\n was the target of an unsuccessful $40 billion acquisition by Nvidia last year. After Nvidia scrubbed the deal and paid a $1.36 billion breakup charge following the\u00a0U.S. Federal Trade Commission\u2019s unanimous decision\u00a0to block it, Nvidia disclosed it paid Arm $750 million for a 20-year license to its technology. <\/p>\n

At the time of the breakup, chips sales had hit record highs in 2021, surging 26.2% to a record $555.9 billion, fueled by pandemic-triggered shortages. But the chip industry has since swung to a glut.<\/p>\n

Arm listed Barclays, Goldman Sachs, JP Morgan, Mizuho, BofA Securities, Citigroup, and Deutsche Bank Securities among the IPO\u2019s underwriters.<\/p>\n

Recent reports said SoftBank was in discussions to purchase the 25% stake in Arm that it does not outright own, which is held by its Vision Fund 1, ahead of the IPO.<\/p>\n

Read from Feb. 2022:<\/strong> Wall Street\u2019s reaction to death of Nvidia-Arm deal: No duh<\/p>\n

Arm reported net income of $524 million, or 51 cents a share, on revenue of $2.68 billion for fiscal 2023, which ended March 31, compared with net income of $549 million, or 54 cents a share, on revenue of $2.7 billion, in fiscal 2022, and $388 million, or 38 cents a share, on revenue of $2.03 billion in fiscal 2021.<\/p>\n

Arm uses an architecture that is different from the once-standard x86 one built by Intel in the early days of computing.\u00a0<\/p>\n

The company said it has shipped more than 250 billion Arm-based chips since it started in 1990 as a joint venture between Acorn Computers, Apple
\n AAPL,
\n +0.77%<\/bg-quote>
\n and VLSI Technology. In fiscal 2023, Arm said it shipped 30.6 billion chips.<\/p>\n

The company said it is going public as the \u201cresources required to develop leading-edge products are significant and continue to increase exponentially as manufacturing process nodes shrink.\u201d Transistors are expressed in scales of nanometers, with design costs running about $249 million for a 7-nanometer chip and about $725 million for a 2-nm chip. <\/p>\n

In fact, a little less than a year ago, Nvidia founder and Chief Executive Jensen Huang underscored just how much costs had shot up, when critics complained about higher-then-expected prices for the company\u2019s new round of gaming chips. \u201cA 12-inch [silicon] wafer is a lot more expensive today than it was yesterday, and it\u2019s not a little bit more expensive, it is a ton more expensive,\u201d Huang said.<\/p>\n

But that was before Nov. 30, when Microsoft Corp.
\n MSFT,
\n +1.71%<\/bg-quote>
\n -backed OpenAI released its generative AI ChatGPT into the wild, triggering a wave of excitement for a technology that luminaries have compared with tech\u2019s greatest achievements. <\/p>\n

\u201cAs the world moves increasingly towards AI- and [machine language]-enabled computing, Arm will be central to this transition,\u201d the company said in the filing. \u201cArm CPUs already run AI and ML workloads in billions of devices, including smartphones, cameras, digital TVs, cars and cloud data centers.\u201d<\/p>\n

Arm said it is working with Alphabet Inc.
\n GOOG,
\n +0.64%<\/bg-quote><\/p>\n

GOOGL,
\n +0.71%<\/bg-quote>,<\/span>
\n GM\u2019s
\n GM,
\n +0.45%<\/bg-quote>
\n Cruise, Mercedes-Benz
\n MBG,
\n +0.78%<\/bg-quote>,<\/span>
\n Meta Platforms Inc.
\n META,
\n +2.35%<\/bg-quote>,<\/span>
\n and Nvidia \u201cto deploy Arm technology to run AI workloads.\u201d<\/p>\n

Following the filing, Pitchbook venture-capital analyst Kyle Stanford said in emailed comments that Arm was \u201ccertainly an intriguing IPO from several different perspectives.\u201d<\/p>\n

\u201cVC-backed tech listings will surely look at the pricing performance of the IPO, but there aren\u2019t as many parallels between Arm and the typical VC-backed unicorn as the market likely hopes,\u201d Stanford said. \u201cArm is riding the AI wave, but it is also reportedly profitable, which continues to be a large point of emphasis for the market.\u201d<\/p>\n

Read: <\/strong>VC spending is in a tailspin, and AI can\u2019t reverse the trend \u2014 yet<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Arm Holdings Ltd. filed its long-awaited initial public offering late Monday, following last year\u2019s failed bid by Nvidia Corp. to acquire the U.K.-based chip architecture company. Arm has reportedly been seeking to raise $8 billion to $10 billion at a valuation of $60 billion to $70 billion, which would make its IPO the biggest of […]<\/p>\n","protected":false},"author":1,"featured_media":51408,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-51407","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nChip designer Arm files for long-awaited IPO, as smaller transistors send costs skyrocketing | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Arm Holdings Ltd. filed its long-awaited initial public offering late Monday, following last year\u2019s failed bid by Nvidia Corp. to acquire the U.K.-based\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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