Arm filed for its initial public offering on Monday, signaling a new era for the British chip designer that is looking to expand on footholds in cloud infrastructure and PCs after dominating the smartphone market for years.
The company is set to return to the public market after operating for several years under the ownership of Japanese investment giant SoftBank Group, which acquired Arm for $32 billion in 2016.
[Related: Amazon’s Potential Arm IPO Investment: 5 Things To Know From AI To AWS]
But even with Arm planning to list on the Nasdaq in September, SoftBank will still own around 90 percent of the company following the IPO, according to multiple reports. The Japanese firm is reportedly seeking a valuation in the range of $60 billion to $70 billion for Arm.
While Arm’s IPO filing did not confirm these details, it did reveal a wealth of previously undisclosed information about the chip designer, including annual revenue trends, the extent of its reliance on China for revenue, a mass layoff from last year and its equity stake in server CPU design startup Ampere Computing.
For instance, the company revealed in its IPO filing that revenue slightly contracted in its most recent fiscal year despite increasing adoption of its chip architecture into products sold by Apple, Amazon, Microsoft and other tech giants.
The IPO filing also made clear the company’s reliance on business in China, which is the target of mounting trade restrictions by the United States and other Western countries, for a significant portion of revenue through an entity it has no control over.
But despite the company’s challenges, Arm is painting itself as the center of the compute universe and said it has significant opportunities to expand in several growing markets, including cloud and data center infrastructure, consumer electronics, industrial IoT and automotive.
“Arm is defining the future of computing. Semiconductor technology has become one of the world’s most critical resources, as it enables all electronic devices today. At the heart of these devices is the CPU, and Arm is the industry leader of CPUs,” the company said near the opening of the filing.
The company said it will also be “central” in the tech industry’s transition to computing enabled by artificial intelligence and machine learning, with Arm-based CPUs already running such workloads in “billions of devices, including smartphones, cameras, digital TVs, cars and cloud data centers.”
What follows are important things to know about Arm from its IPO filing, including annual revenue trends, its evolving business model, its concerns about customers developing custom Arm chips, details around a mass layoff from last year, its reliance on China and its stake in chip design startup Ampere.
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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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