Arm, the British chip design unit of SoftBank Group, is planning to hold its initial public offering (IPO) on the Nasdaq in September, with an expected market capitalization of over $60 billion. This move could potentially make it the largest IPO of the year so far. SoftBank will apply for the IPO with the U.S. Securities and Exchange Commission later this month and seek approval from Nasdaq. Prominent chipmakers like Apple, Samsung Electronics, Nvidia, and Intel intend to invest in Arm once it becomes publicly listed.
The IPO for Arm is scheduled for the middle to end of September. The company is gauging investor interest and aims to increase its corporate value. Since SoftBank acquired Arm for $24 billion pounds ($31 billion at that time) in 2016, its valuation has doubled.
SoftBank currently holds 75% of Arm’s shares, while the SoftBank Vision Fund, a unit that invests in global tech companies, owns the remaining 25%. The Vision Fund plans to sell 10% to 15% of its Arm shares on the open market. Arm intends to bring major chipmakers on board as medium- to long-term shareholders, offering them small stakes to help stabilize the stock price upon listing.
Arm, headquartered in Cambridge, UK, is a vital player in the global semiconductor industry. It has achieved a dominant market share of over 90% for power-efficient chip designs used in smartphones. The company’s sales reached $2.8 billion in the fiscal year 2022, marking a 70% increase from 2016 when SoftBank acquired it.
Following SoftBank’s acquisition in 2016, Arm became a key component of the group. Despite an earlier agreement to be acquired by Nvidia for $40 billion in 2020, the deal was abandoned due to regulatory concerns. Since then, SoftBank has aimed to take Arm public. The upcoming IPO is seen as a positive sign for the tech industry, given the recent challenges faced by high-tech stocks.