The British chip designer Arm has started the process of listing its shares on New York’s Nasdaq, in one of the biggest flotations of recent years after the London Stock Exchange lost out.
The company, owned by Japanese investor SoftBank, registered to list its shares late on Monday night, after months of waiting amid tricky conditions for stock market floats.
The listing will return Arm to stock markets after seven years under SoftBank and its leader, Masayoshi Son, who took the chip designer private in 2016 in a £24bn deal. An internal SoftBank transaction this month valued Arm at $64bn (£50bn), according to reports.
Arm, based in Cambridge, is one of the UK’s rare big tech champions. Founded in 1990, it has played a key role in the mobile computing revolution, with its designs used for semiconductor chips in Apple’s iPhones and laptops, Samsung’s phones and a host of other devices ranging from electric and driverless cars to drones. Its chip designs have been used in more than 250bn devices.
While the company has remained rooted in the UK, the New York listing comes after a failed effort by the British government, led by Rishi Sunak, to persuade it and other tech companies to list shares in London.
The listing is the second time that SoftBank has tried to cash in on its investment. In 2021, the tech-focused investor agreed a deal to sell Arm to the US chipmaker Nvidia for $40bn. However, that deal fell through last year after UK competition regulators objected.
The US filing showed that 30.6bn chips using Arm designs were made in the year to March, up from 29.2bn the year before. However, revenues were flat at $2.7bn, and its net income dropped from $676m to $524m.
Arm has not revealed how many shares it will offer or the hoped-for valuation, although SoftBank will continue to control the company. The listing will not provide any proceeds to Arm itself.
Arm said it expected the chip market to grow by 6.8% a year until 2025, with the increasing complexity of semiconductors required to power smartphones and to train artificial intelligence algorithms allowing the company to contribute more towards the value of each chip.
The filing also revealed that Arm earns a quarter of its revenues from China. Arm said that reliance made it “particularly susceptible to economic and political risks” at a time when the US government is attempting to limit China’s access to the most advanced chip-making technology. It said US, UK or Chinese restrictions could “materially harm” its business.
The Arm chief executive, Rene Haas, has been awarded $20m in stock, and will receive a further $20m in cash if the listing completes.
Barclays, Goldman Sachs, JP Morgan and Japan’s Mizuho will lead the initial public offering of Arm’s shares, with another 24 banks lined up to share in the fees for the mega-deal.
