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Softbank UK IPO sees investment from tech giants Apple and Samsung

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Tech giants Apple and Samsung are expected to invest in the IPO of SoftBank Group’s, Arm UK chips division. The deal will happen in September and is expected to be the biggest of the year.

The world’s largest cellphone makers will be joined in the IPO by major computer companies Intel and Nvidia, which will be listed on the Nasdaq Composite in New York and will give Arm a market cap of more than $60 billion. Tokyo-based SoftBank, one of Japan’s largest investment firms, will apply for a listing with the US Securities and Exchange Commission later this month and await Nasdaq approval. The advantages of using ARM-based chips include low power consumption, faster performance, energy efficiency and cost effectiveness in manufacturing. Because of their small size and scalability, they can be used diversely, from portable devices to servers.

SoftBank owns 75 percent of Arm’s shares, with the remaining 25 percent held by the SoftBank Vision Fund, which plans to sell 10 to 15 percent of Arm’s shares. Vision Fund is SoftBank’s unit that invests in technology companies around the world. Cambridge-based Arm intends to sell stakes of a few percent each to major chipmakers to make them shareholders in the medium and long term, a move aimed at stabilizing the share price at the time of listing. But Soft Bank and Arm did not comment on the report.

Arm is the largest IPO ever in the semiconductor industry, with an expected valuation range of $30 billion to $70 billion

Arm’s IPO would be its biggest in a year after France’s Technicolor Creative Studios listed on the Euronext exchange for $97 billion last September. It would also help boost technology stocks and maintain the strength of the global IPO market. Masayoshi Son, Chairman and CEO of SoftBank, hinted that Arm is the largest IPO ever in the semiconductor industry, with an expected valuation range of $30 billion to $70 billion. Arm was founded in 1990 as Advanced RISC Machines, hence its current name. The company manufactures chips based on the Arm architecture that power the most popular consumer electronic devices, especially smartphones, tablets, computers and wearable devices.

More than 250 billion chips manufactured by the company are built into devices worldwide, and according to its website, about 70 percent of the world’s population uses Arm-based technology in all markets. Son said that he expects that number to reach one trillion.

Arm’s revenue rose 70 percent to $2.8 billion in fiscal 2022 compared to fiscal 2016, when SoftBank bought the company for £24.3 billion (about $31 billion at the time). Its biggest competitors include AMD, IBM, Intel, Nvidia, Qualcomm, etc.