Arm, the chip designer owned by SoftBank, has filed for an initial public offering (IPO) on the Nasdaq exchange, making it one of the largest listings in recent years. The UK-based company revealed this information in a filing with the US Securities And Exchange Commission. While the proposed share price has not been listed yet, Arm 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. SoftBank later struck a deal to sell the unit to US chip maker Nvidia for $40 billion. However, Nvidia abandoned the offer after the Federal Trade Commission sued to stop the deal, citing concerns over competition and national security.
According to the filing, approximately 70 percent of the world’s population uses Arm-based products. In the fiscal year ending March 31, 2023, more than 30 billion Arm-based chips were shipped, representing a 70 percent increase since 2016.
The filing also revealed that over 260 companies, including tech giants Amazon and Alphabet, as well as major semiconductor chip vendors like Intel, NVIDIA, Qualcomm, and Samsung, have reported shipping Arm-based chips. Arm’s technology is also included in Apple’s chips for iPhones.
In terms of financials, Arm recorded net income of $105 million and total revenue of $675 million from continuing operations in the first quarter, both lower than the previous year. For the fiscal year ending in March, the company reported $524 million in net income on $2.68 billion in revenue, a decrease from the previous year’s net income of $676 million and revenues of $2.70 billion. Three customers accounted for 44 percent of total revenue for the fiscal year.
The filing comes as Arm anticipates significant growth in demand for chips, fueled by the rising number of smart devices in consumer and enterprise markets and the increasing use of artificial intelligence (AI), particularly generative AI applications.
Arm stated, 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.
In conclusion, Arm’s filing for an IPO on the Nasdaq highlights its position as a leading chip designer and the potential for growth in the chip market across various industries. With its widespread adoption and involvement in AI technologies, Arm aims to capitalize on the increasing demand for chips in smart devices and generative AI applications. As the IPO progresses, market watchers will be keen to see how investors respond to this significant listing.
