UK chipmaker Arm targets $60B-plus valuation for September IPO

British chip maker Arm is targeting an initial public offering (IPO) at a valuation of between $60bn and $70bn as early as September, amid surging demand for semiconductors for cloud computing, AI, and EV applications.  

The roadshow is scheduled to start the first week of September with pricing for the IPO the following week, Bloomberg reports, citing people familiar with the matter. A roadshow in this context is a series of lead-up events that give a company the chance to showcase its value proposition, wow potential investors, and ultimately, increase their buy-in.   

Arm looks to raise as much as $10bn at its debut into the public market. This would make it one of the biggest-ever IPOs in the history of the tech industry, third only to Alibaba in 2014 and Meta in 2012.    

Earlier this year, bankers valued the chipmaker at between $30bn and $70bn. Arm executives may still be gunning for a valuation as high as $80bn, but the odds of achieving this are “uncertain,” said Bloomberg’s source. 

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Arm has been planning the IPO for a while now. In April, it confidentially filed with regulators for a US stock market listing, after turning down the British government’s request to list its shares in London.   

Often described as the UK’s leading IT company, Cambridge-based Arm designs energy-efficient computer chips. The company’s architectures are found in endless applications, from smart cities to laptops, but they’re best known for powering mobile devices. Around 95% of the world’s smartphones use its technology.

Arm’s designs are used to manufacture chips made by most of the world’s major semiconductor companies, including Intel, AMD, Nvidia, and Qualcomm. Both Nvidia and Intel are now in talks to become anchor investors in the British firm.   

“Arm has had a hugely important but behind-the-scenes and not-very-well-understood role for a very long time,” Bob O’Donnell, president of TECHnalysis Research, told Bloomberg. “There’s this raised awareness now of what Arm does and the role that it plays.”  

Since taking over last year CEO Rene Hass has been working to branch out beyond the smartphone market, targeting more advanced computing applications, such as those for cloud computing and AI applications. The firm has also made strides in the automotive sector, where it has more than doubled its revenues since 2020. Going public could be the funding boost Arm needs to further exploit these rapidly emerging markets.