UK chipmaker Arm aims for a valuation of over $60B in September IPO.

UK chipmaker Arm aims for a valuation of over $60B in September IPO.

Arm Aims for $60–70 Billion IPO Valuation in September

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British chip maker Arm is gearing up for an initial public offering (IPO) with a valuation target between $60 billion and $70 billion. This move comes amidst the increasing demand for semiconductors, particularly for cloud computing, artificial intelligence (AI), and electric vehicle (EV) applications. The IPO is set to take place as early as September, and Arm hopes to raise as much as $10 billion, making it one of the largest IPOs in the tech industry’s history.

The roadshow, a series of lead-up events to showcase the company’s value proposition and attract potential investors, will kick off in the first week of September. Pricing for the IPO is expected to happen in the following week. While Arm executives have been aiming for a valuation as high as $80 billion, achieving this remains uncertain, according to Bloomberg’s sources.

Earlier this year, bankers estimated Arm’s value to be between $30 billion and $70 billion. Since then, Arm has been planning its IPO, which began with a confidential filing to regulators for a US stock market listing. This decision was made after turning down the British government’s request to list its shares in London.

Cambridge-based Arm, often referred to as the UK’s leading IT company, specializes in designing energy-efficient computer chips. Its chip architectures have a wide range of applications, from powering smart cities to laptops, but they are best known for their dominance in the mobile device market. In fact, approximately 95% of the world’s smartphones utilize Arm’s technology.

Arm’s chip designs are used by major semiconductor companies such as Intel, AMD, Nvidia, and Qualcomm. In a significant development, both Nvidia and Intel are currently in talks to become anchor investors in Arm. This demonstrates the growing recognition of Arm’s crucial role in the industry.

“Arm has had a hugely important but behind-the-scenes and not-very-well-understood role for a very long time,” stated Bob O’Donnell, president of TECHnalysis Research, to Bloomberg. “There’s this raised awareness now of what Arm does and the role that it plays.”

Under the leadership of CEO Rene Hass, who assumed the position last year, Arm has been actively expanding into advanced computing applications beyond smartphones. This includes targeting cloud computing and AI applications, where the company aims to establish a stronger presence. Additionally, Arm has experienced notable growth in the automotive sector, with its revenues more than doubling since 2020.

By going public, Arm aspires to secure the necessary funding to further exploit these rapidly emerging markets. The IPO will provide the company with the infusion of capital required to continue its expansion and solidify its position as a key player in the semiconductor industry.

Arm’s anticipated IPO with a valuation of $60–70 billion marks a significant milestone for the company and the broader tech industry. As the demand for semiconductors continues to soar, driven by the increasing adoption of cloud computing, AI, and EVs, Arm is positioning itself to capitalize on these trends. With its reputable chip designs and potential anchor investors such as Nvidia and Intel, Arm is well-positioned for a successful IPO and a promising future in the rapidly evolving tech landscape.

Sources: – Bloomberg