Chip design firm Arm, owned by the SoftBank group, has filed for IPO in the United States. Market watchers expect the offer to be one of the highest in history for a tech company and is expected to be worth more than $70 billion overall.
The move comes after SoftBank acquired the bottom 25% of the company for $16 billion, essentially valuing the chip company at $64 billion. Bloomberg has suggested that Arm is looking to raise about $10 billion, as the number of official shares that will be in the public offering has not yet been revealed.
The company said in the statement that “about 70% of the world’s population uses Arm-based products,” and last year it had a 49% share of a total addressable market worth just over $200 billion. The smartphone market is currently in a slump, prompting Arm to delve into automotive and cloud computing as well as artificial intelligence.
One of the risk factors warned by Arm in the listing is the “economic and political risks” with China, the largest smartphone market in the world. Royalty revenue from the Asian country declined in 2022 and the relationship with the region is further complicated by ownership of Arm China, a semi-independently operating company.
Arm was formerly a publicly traded company, which made the new IPO less risky than usual. Nonetheless, regulators and banking institutions will closely monitor the offer as evidence of the market’s strength after an 18-month drought.
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