British chip designer Arm has disclosed that AMD, Apple and Google are among the potential “cornerstone investors” in the company’s much-hyped initial public offering. Two other named investors, Intel and Nvidia, confirmed that they plan to invest in Arm’s IPO.
In an updated IPO filing Tuesday, the Cambridge, U.K.-based semiconductor company divulged the 10 cornerstone investors and said it will seek a valuation of up to $52 billion when it lists under the “ARM” ticker on Nasdaq, reportedly happening next week.
[Related: Arm’s IPO Filing: Revenue, China Reliance, Ampere Stake And Other Things To Know ]
The filing said Arm plans to offer 95.5 million American depository shares in the range of $47 to $51 apiece. The company’s current owner, Japanese investment giant SoftBank Group, plans to own roughly 90 percent of Arm’s shares following the IPO, according to the filing.
Arm said the 10 cornerstone investors—which also include Samsung Electronics and MediaTek—have “indicated an interest in purchasing up to an aggregate of $735 million” of its shares in the IPO. However, the company added, “these indications of interest are not binding agreements or commitments.”
While Amazon reportedly held talks earlier this summer to invest in Arm’s IPO, the e-commerce giant no longer plans to do so, Reuters reported last week.
Bob O’Donnell, president and chief analyst at TECHnalysis Research, said the investment interest by several major tech and semiconductor companies reflects the “absolutely critical importance of Arm and its continued strong existence and development.”
For years, Arm’s architecture has served as the foundation for chips in most of the world’s smartphones, and the company is now starting to gain momentum in the server and PC markets. The chip designer’s technologies are also prevalent in industrial IoT and embedded devices as well as vehicles.
The potential investors include several companies that develop chips using Arm’s instruction set architecture,and, in some cases, processor designs. Among the 10, Apple completely relies on Arm’s architecture for its entire portfolio of devices while others use Arm for some products.
“Their whole future is dependent on the Arm architecture, and they want to keep the people who built this in the first place going,” O’Donnell told CRN in a recent interview.
The investor list also includes Taiwanese foundry giant TSMC, which manufactures a significant portion of chips for Arm’s customers. Samsung too fabricates Arm-based chips while also using those chips for its various devices, such as the Galaxy S23 smartphones and Galaxy Tab S9 tablets.
Then there’s Intel. While the semiconductor giant relies on the x86 instruction set architecture for its CPUs, it develops some chips that use Arm technology, such as its infrastructure processing units. But the chipmaker also hopes to manufacture a large share of Arm-based chips for other companies as part of its drive to build a significant contract chip manufacturing business with Intel Foundry Services.
“Arm has played this absolutely foundational role in the tech business but in a pretty much invisible way to most of the outside world for a very long time,” O’Donnell said.
What follows are summaries of the 10 confirmed and potential investors in Arm’s IPO as well as explanations of how each company is connected to the British chip designer.
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Dylan Martin is a senior editor at CRN covering the semiconductor, PC, mobile device, and IoT beats. He has distinguished his coverage of the semiconductor industry thanks to insightful interviews with CEOs and top executives; scoops and exclusives about product, strategy and personnel changes; and analyses that dig into the why behind the news. He can be reached at [email protected].
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