SoftBank Chip Unit Arm Files For US IPO

(RTTNews) - Chip designer Arm, owned by Japan's SoftBank, has filed for an initial public offering in the United States. The proposed IPO on the Nasdaq exchange is expected to be one of the largest listing in recent years.

The UK-based company revealed the IPO information in a filing with the U.S. Securities And Exchange Commission, while a prospective share price is yet to be listed. The company plans to trade under the ticker symbol "ARM."

Arm, which started as a joint venture, first went public in 1998, before being taken private by SoftBank in 2016 in a $32 billion deal. Later, the Japanese bank had stuck a deal to sell the unit to U.S. chip maker Nvidia for $40 billion. However, Nvidia abandoned its offer after the Federal Trade Commission had sued to stop the deal citing concerns over competition and national security.

According to the filing, around 70 percent of the world's population is estimated to use Arm-based products. More than 30 billion Arm-based chips reported as shipped in the fiscal year ended March 31, 2023 alone, representing around 70 percent increase since 2016.

The filing also shows that more than 260 companies reported to have shipped Arm-based chips in the last year, including tech majors Amazon.com, Inc. and Alphabet Inc., and major semiconductor chip vendors, such as Advanced Micro Devices, Inc., Intel Corp., NVIDIA Corp., Qualcomm Inc. and Samsung Electronics Co., Ltd., among others. Its technology is also included in Apple's chips for iPhones.

Arm in its first quarter recorded net income from continuing operations of $105 million and total revenue of $675 million, both lower than last year. For the fiscal year that ended in March, the company reported $524 million in net income on $2.68 billion in revenue, lower than last year's net income of $676 million and revenues of $2.70 billion.

For the fiscal year, the company said it had three customers that collectively represented 44 percent of total revenue.

The news comes as Arm projects significant demand growth for chips with the exponential rise in smart devices in both consumer and enterprise markets, and amid the increasing use of artificial intelligence or AI, mainly generative AI applications.

The company said, "As the world moves increasingly towards AI- and ML-enabled computing, Arm will be central to this transition. Arm CPUs already run AI and ML workloads in billions of devices, including smartphones, cameras, digital TVs, cars and cloud data centers. The CPU is vital in all AI systems, whether it is handling the AI workload entirely or in combination with a co-processor, such as a GPU or an NPU. In the emerging area of large language models, generative AI and autonomous driving, there will be a heightened emphasis on the low power acceleration of these algorithms."

As of March 31, Arm had 5,963 full-time employees across North America, Europe and Asia.