Chip Giant ARM to Go Public With Highest Offering in Tech History

Arm, a chip design firm under the ownership of SoftBank Group, has submitted its (Initial Public Offering) IPO application in the United States.

Industry experts anticipate that this offering will set a new benchmark for tech companies in terms of valuation, potentially exceeding a remarkable $70 billion.

Notably, SoftBank recently concluded its acquisition of the remaining 25% stake in Arm for a substantial sum of $16 billion. This transaction effectively valued the chip company at approximately $64 billion.

Reports from Bloomberg suggest that Arm aims to secure roughly $10 billion through its IPO, although the precise count of official shares earmarked for the public offering remains undisclosed.

As disclosed within the filing, Arm stated that approximately 70% of the global population utilizes products based on its technology. Furthermore, it commanded a considerable 49% market share within a total addressable market valued at slightly over $200 billion in the previous year.

However, the smartphone sector is currently undergoing a downturn, prompting Arm to diversify its efforts into automotive applications, cloud computing, and the realm of artificial intelligence.

Among the potential hazards outlined by Arm in the IPO listing, it highlighted the presence of “economic and political risks” particularly in relation to China, the world’s largest smartphone market. In the year 2022, royalty revenue originating from this Asian nation experienced a decline. The intricacies of its association with the region are exacerbated by its connection with Arm China, an entity that operates with a degree of independence.

In the past, Arm was a company with publicly traded shares, which lends a certain degree of familiarity to the upcoming IPO process, potentially reducing inherent risk. Nevertheless, both regulatory bodies and financial institutions are expected to closely monitor this offering, viewing it as a litmus test for market resilience following a prolonged period of stagnation lasting 18 months.

Via: Gsmarena

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