Arm’s IPO attracts $735 million investment interest from clients and partners.

In recent SEC filings, ARM, the chip IP designer, has announced a significant lineup of industry investors ahead of its highly anticipated IPO. With an estimated valuation of $52 billion, Arm has been actively seeking major industry customers to serve as cornerstone investors. The company has successfully secured commitments from important players in the tech industry, including AMD, Apple, Cadence, Google, Intel, MediaTek, nVidia, Samsung, Synopsys, and TSMC. These companies have expressed their interest in purchasing up to a total of $735 million worth of Arm’s American Depositary Shares (ADS), as disclosed by SoftBank, Arm’s owner, in a filing with the Securities and Exchange Commission.

While the exact number of shares to be purchased remains undisclosed and subject to change, a $735 million investment at the upper-end price of $51 per share would represent slightly over 15% of the 95.5 million Arm shares that SoftBank plans to offer in the IPO. In terms of the projected $52 billion valuation, this would give the cornerstone investors a combined ownership stake of 1.4% in Arm.

The list of companies interested in purchasing Arm shares is quite impressive, featuring not only Arm’s partners and clients like Apple, Cadence, Google, Samsung, and TSMC but also customer-rivals such as AMD and Intel. While these competitors utilize Arm’s IP in some of their chips, they also compete with Arm designs in other chips. Notably absent from the cornerstone investor group are other major Arm customers like Qualcomm and Amazon.

The cornerstone investors represent a diverse mix of fabless chip designers, tool vendors, and all three leading fabs globally. Intel, for instance, is establishing its Intel Foundry Services (IFS) group to manufacture chips for fabless chip designers, many of whom rely on Arm’s cores. Therefore, close collaboration with Arm is crucial for IFS, making it beneficial for Intel to own a stake in Arm.

Stuart Pann, Senior Vice President and General Manager of Intel Foundry Services, emphasized the significance of Arm in the industry, stating that “80% of TSMC wafers have an Arm processor in them.” Pann’s remarks at the Goldman Sachs Communacopia & Technology Conference highlighted Intel’s commitment to working with Arm and investing in the company. He emphasized that without collaboration with Arm, Intel cannot effectively serve as a foundries provider.

Interestingly, Pann also mentioned that IFS will increasingly focus on Arm and RISC-V instruction set architectures, as they are expected to drive chip volumes. This aligns with Intel’s goal of maximizing production at its fabs.

In another noteworthy development, Apple, one of Arm’s original founders in the 1990s, extended its license agreement with Arm beyond 2040. This move demonstrates Apple’s confidence in Arm’s instruction set architecture (ISA) and its ongoing development. Considering that all of Apple’s current products incorporate at least one Arm CPU core, it is safe to assume that the partnership between the two companies will continue well into the future.

Background Information

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About AMD:

AMD, a large player in the semiconductor industry is known for its powerful processors and graphic solutions, AMD has consistently pushed the boundaries of performance, efficiency, and user experience. With a customer-centric approach, the company has cultivated a reputation for delivering high-performance solutions that cater to the needs of gamers, professionals, and general users. AMD's Ryzen series of processors have redefined the landscape of desktop and laptop computing, offering impressive multi-core performance and competitive pricing that has challenged the dominance of its competitors. Complementing its processor expertise, AMD's Radeon graphics cards have also earned accolades for their efficiency and exceptional graphical capabilities, making them a favored choice among gamers and content creators. The company's commitment to innovation and technology continues to shape the client computing landscape, providing users with powerful tools to fuel their digital endeavors.

  

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About Apple:

Apple Inc., known for its iconic products, was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976. The company has since revolutionized the technology landscape with innovations like the Macintosh computer, iPod, iPhone, iPad, and more. for its emphasis on design, user experience, and ecosystem integration, Apple's devices and software have made a profound impact on various industries. With a commitment to quality and innovation, Apple remains a global technology leader.

  

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About ARM:

ARM, originally known as Acorn RISC Machine, is a British semiconductor and software design company that specializes in creating energy-efficient microprocessors, system-on-chip (SoC) designs, and related technologies. Founded in 1990, ARM has become a important player in the global semiconductor industry and is widely recognized for its contributions to mobile computing, embedded systems, and Internet of Things (IoT) devices. ARM's microprocessor designs are based on the Reduced Instruction Set Computing (RISC) architecture, which prioritizes simplicity and efficiency in instruction execution. This approach has enabled ARM to produce highly efficient and power-saving processors that are used in a vast array of devices, ranging from smartphones and tablets to IoT devices, smart TVs, and more. The company does not manufacture its own chips but licenses its processor designs and intellectual property to a wide range of manufacturers, including Qualcomm, Apple, Samsung, and NVIDIA, who then integrate ARM's technology into their own SoCs. This licensing model has contributed to ARM's widespread adoption and influence across various industries.

  

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About Crucial Technology:

Crucial Technology, founded in 1996, is a leading manufacturer of computer memory and storage solutions. They are known for producing a wide range of products, including solid-state drives (SSDs), RAM modules, and portable storage devices. Crucial's products are designed to enhance the performance and speed of computers, whether it's upgrading an older system or improving the capabilities of a new one.

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About Google:

Google, founded by Larry Page and Sergey Brin in 1998, is a multinational technology company known for its internet-related services and products. Initially for its search engine, Google has since expanded into various domains including online advertising, cloud computing, software development, and hardware devices. With its innovative approach, Google has introduced influential products such as Google Search, Android OS, Google Maps, and Google Drive. The company's commitment to research and development has led to advancements in artificial intelligence and machine learning.

  

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About Intel:

Intel Corporation, a global technology leader, is for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.

  

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About MediaTek:

MediaTek Inc. is a Taiwanese semiconductor company that designs and manufactures a wide range of system-on-chip (SoC) solutions for various consumer electronics, including smartphones, tablets, smart TVs, wearables, and IoT (Internet of Things) devices. Founded in 1997, MediaTek has become a important player in the semiconductor industry, known for its innovative chipsets that offer a balance of performance, power efficiency, and affordability.

  

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About nVidia:

NVIDIA has firmly established itself as a leader in the realm of client computing, continuously pushing the boundaries of innovation in graphics and AI technologies. With a deep commitment to enhancing user experiences, NVIDIA's client computing business focuses on delivering solutions that power everything from gaming and creative workloads to enterprise applications. for its GeForce graphics cards, the company has redefined high-performance gaming, setting industry standards for realistic visuals, fluid frame rates, and immersive experiences. Complementing its gaming expertise, NVIDIA's Quadro and NVIDIA RTX graphics cards cater to professionals in design, content creation, and scientific fields, enabling real-time ray tracing and AI-driven workflows that elevate productivity and creativity to unprecedented heights. By seamlessly integrating graphics, AI, and software, NVIDIA continues to shape the landscape of client computing, fostering innovation and immersive interactions in a rapidly evolving digital world.

  

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About Qualcomm:

Qualcomm, a leading American global semiconductor and telecommunications equipment company, has played a pivotal role in shaping the modern technology landscape. Founded in 1985, Qualcomm has been at the forefront of innovation, particularly in the realm of mobile communications and wireless technology. The company's advancements have been instrumental in the evolution of smartphones, powering devices with their Snapdragon processors that deliver exceptional performance and efficiency. With a strong commitment to research and development, Qualcomm has enabled the growth of 5G technology, paving the way for faster and more connected experiences.

  

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About Samsung:

Samsung, a South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

  

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About Synopsys:

Synopsys is a important American software company that specializes in electronic design automation (EDA) and semiconductor intellectual property. Founded in 1986, Synopsys provides tools and solutions for designing and testing complex integrated circuits and electronic systems. Their software aids in the development of semiconductors, electronic products, and software applications, playing a crucial role in advancing technological innovation across various industries. For more detailed information about their products and contributions, you can visit their official website at

  

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About TSMC:

TSMC, or Taiwan Semiconductor Manufacturing Company, is a semiconductor foundry based in Taiwan. Established in 1987, TSMC is a important player in the global semiconductor industry, specializing in the manufacturing of semiconductor wafers for a wide range of clients, including technology companies and chip designers. The company is known for its semiconductor fabrication processes and plays a critical role in advancing semiconductor technology worldwide.

  

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Technology Explained

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CPU: The Central Processing Unit (CPU) is the brain of a computer, responsible for executing instructions and performing calculations. It is the most important component of a computer system, as it is responsible for controlling all other components. CPUs are used in a wide range of applications, from desktop computers to mobile devices, gaming consoles, and even supercomputers. CPUs are used to process data, execute instructions, and control the flow of information within a computer system. They are also used to control the input and output of data, as well as to store and retrieve data from memory. CPUs are essential for the functioning of any computer system, and their applications in the computer industry are vast.

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Foundry: A foundry is a dedicated manufacturing facility focused on producing semiconductor components like integrated circuits (ICs) for external clients. These foundries are pivotal in the semiconductor industry, providing diverse manufacturing processes and technologies to create chips based on designs from fabless semiconductor firms or other customers. This setup empowers companies to concentrate on innovative design without needing substantial investments in manufacturing infrastructure. Some well-known foundries include TSMC (Taiwan Semiconductor Manufacturing Company), Samsung Foundry, GlobalFoundries, and UMC (United Microelectronics Corporation).

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