Bloomberg News reports that Arm Ltd, the semiconductor unit of SoftBank Group Corp, is planning an initial public offering (IPO). The valuation of this IPO is expected to be between USD60 billion, equivalent to RM272.55 billion, and USD70 billion, as early as September. This is a signal of bullish interest in the AI or artificial intelligence market. The same was revealed by people that are familiar with the matter.
Roadshow for the IPO
The roadshow is expected to start in the first week of September. And the following week, the IPO pricing will be carried out. Amidst a market mood in favor of generative artificial intelligence and chip technologies, the Arm’s valuation underscores the latest target.
At the beginning of the year, bankers had pitched a range of valuations between USD30 billion and USD70 billion for the chip designer.
SoftBank is led by Masayoshi Son and the chief executive officer of Arm, Rene Haas. They have considered that the bottom of the range is too low. The executives of Arm are still trying for the valuation to be as high as USD80 billion. However, there are odds of attaining the target which is not certain. The chip company is looking forward to increasing it by as much as USD10 billion in the initial public offering, as reported by Bloomberg News.
Arm’s confidential filing
There has been a confidential filing in April for the US listing. A couple of big names in the industry, like Intel Corp and Nvidia Corp, have had preliminary talks with the aim of becoming anchor investors in the initial public offering. This could be the biggest market debut of the year.
Bloomberg News reports that names like Barclays PLC, JPMorgan Chase & Co, Mizuho Financial Group Inc., and Goldman Sachs Group Inc have been named in the filing for this IPO.
You will find the UK-based company’s technology in almost all smartphones under the sun. Nevertheless, the position of the company in the industry has been obscure for a long.
What does Arm do?
Arm has been selling the blueprints required for designing the microprocessors and licenses for the technology. These are referred to as instruction sets that usually dictate the communication of the software programs with those of the chips.
Arm’s power efficiency technology has helped it become ubiquitous on smartphones since the battery life of these devices is critical.
Haas took over as the chief executive officer last year. He is working for the expansion beyond the smartphone market, which faced stagnation in the current year. He has been targeting advanced computing, specifically the chips for the data centers for AI applications and cloud computing.
What is Arm’s Estimate?
Arm’s estimated value for IPO has been fluctuating wildly. However, it has been in tandem with the chip stocks ever since SoftBank acquired the company in 2016 for USD$ 32 billion, thereby de-listing it from the London Stock Exchange.
