UK microchip giant Arm files to sell shares in US

London: The Cambridge-based company, which designs chips for devices from smartphones to game consoles, plans to list on New York’s Nasdaq in September.

Arm did not reveal the number of shares for sale or the price, but its proposed initial public offering (IPO) could be the biggest listing since late 2021.

In March, in a blow to the UK, the firm opted against listing shares in London.

On Monday, Arm announced that it had now publicly filed a registration statement relating to a proposed IPO. It said the number of shares to be offered and the price range for them were yet to be determined.

But the company is reportedly looking for a valuation of between $60bn (£47bn) to $70bn.

Arm was bought in 2016 by Japanese conglomerate Softbank in a deal worth £23.4bn. Prior to the takeover, it was listed in both London and New York for 18 years.

Its chip design instructions and technologies are used by manufacturers like the Taiwan Semiconductor Manufacturing Company and technology giants Apple and Samsung to make their own chips.

Listing a firm on a stock exchange takes it from being a private firm to a public company, with investors able to buy and sell shares of a company’s stock on specific exchanges.

Reports previously suggested the firm had sought to raise between $8bn and $10bn through the listing on the technology-heavy Nasdaq platform. Other major technology companies including Google, Apple and Facebook trade on the Nasdaq.

Private companies, as a way of raising cash, can start a process to list on a stock exchange. In an IPO companies offer shares to investors before listing.

The price of the shares is typically set by investment banks hired by the company to run the process.

But once the shares start to be publicly traded, prices are set by supply and demand. The value of the shares, multiplied by how many there are, gives the market value of the company.

Arm was founded in 1990 and has been referred to as the “crown jewel” of the UK’s technology sector.

Reports in January said Prime Minister Rishi Sunak had restarted talks with Arm’s owner about listing on the London Stock Exchange.

But the firm said it did not plan to pursue a UK listing, saying the US was “the best path forward”.

The decision raised concerns that the UK market was not doing enough to attract tech company stock offerings, with US exchanges seen to offer higher profiles and valuations.

But Arm’s chief executive Rene Haas has said the company will keep its material intellectual property, headquarters and operations in the UK.

The latest filing shows further intent that Softbank is pushing ahead with the multi-billion dollar sale despite difficult conditions in the global financial markets.

The number of stock market listings has fallen sharply since Russia’s invasion of Ukraine. Shares in major technology companies have also fallen in the wake of the Covid pandemic.

After an acute shortage of semiconductors during the pandemic, the chip-making industry has faced reduced demand.

Arm’s sales declined to $2.68bn in the year ended 31 March, hurt by a slump in global smartphone shipments. Sales for the three months to 30 June fell 2.5% to $675m.