SoftBank's Arm filed to list its Nasdaq-listed company on Monday.
The U.K. chipmaker wants to go public in a historically low period for U.S. initial public offerings.
SoftBank acquired Arm in 2016 for $32 billion.
Arm, the Chipmaker
SoftBank, a Japanese company, is the owner of this business
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Nasdaq on Monday to position itself for a tech IPO during a historically low period.
The company would like to trade under "ARM."
According to the filing, Arm's fiscal 2023 ended in March and reported a net profit of $524 million on $2.68 billion revenue. Arm's revenue in 2023 was slightly lower than the $2.7 billion sales that it made in 2022.
The U.K. based company
Filled confidentially for an listing in the U.S
Earlier this year, after
It was announced in advance that it would be made public in the U.S. rather than the U.K.
The London Stock Exchange was dealt a serious blow.
Arm is one the largest chip companies. It sells licensing for an instruction set that is at the core of almost every mobile chip and, increasingly, PCs and servers. It has been focusing on selling more complete chip designs in recent years as this is more profitable.
According to the filing, ARM chips are produced by many companies, including Amazon, Alphabet AMD, Intel Nvidia Qualcomm and Samsung. Apple uses its technology in the chips that go into iPhones. Arm stated that its technology is included in more than 30 billion chips shipped during its fiscal year 2023. Arm charges a fee for every chip shipped that uses its technology.
Originally, Arm was looking to sell to chip giant
The deal was met with a lot of resistance from regulators who were concerned about national security and competition. SoftBank bought Arm in 2016, in a $32 billion deal.
Arm has not provided a projected share value, so it is not possible to estimate the valuation of its shares.
The critical component
Arm, which has just under 6000 staff, is a major player in the consumer electronics industry. It designs the architecture of the chips found in 95% of smartphones.
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In 1990, the company was formed as a joint-venture between Apple and several other companies to develop a low power processor for devices powered by batteries. SoftBank took it private in 2016, after first going public in 1998.
The company also faces headwinds due to a decline in demand for smartphones that has affected chip makers across the board. SoftBank reported that Arm's second-quarter net sales dropped 4.6% compared to the same period last year, and the unit ended up with a loss. SoftBank's Vision Fund has suffered billions in losses due to bets on tech that have soured because of high interest rates.
Arm's filing argues that its technology is essential for AI applications. However, it does not focus on graphics processors which are needed to create large AI models. Arm stated in its filing that "the CPU is essential in all AI systems. Whether it handles the AI workload completely or in conjunction with a coprocessor, such a GPU, or an NPU, the CPU is crucial."
Arm identified x86 (the instruction set used by Intel and AMD processors) as a source of competition, along with RISC V, an open-source instruction set backed up by several large tech companies.
Arm will be released at a moment when investors are flocking towards next-generation chips due to the artificial intelligence boom, and in particular the popularity of generative AI. Nvidia has been the most prominent chipmaker in the generative AI boom.
Stock price tripled this year
The tech IPO market is still a relatively new phenomenon.
Since December 2021, there have been no notable venture-backed transactions. Last October.
Spin-out of self-driving technology company
The stock is down just 17% from its first-day close.
Investors may look to ARM as a sign of the demand for new products. Instacart, a grocery delivery service, is one of the late-stage startups.
According to reports, a reportedly prepared
To submit IPO paperwork to SEC.