ARM Boss Committed To Public Listing In 2023

A public listing of ARM Holdings is on the cards for this year, at least according to chief executive Rene Haas.

In an interview with Reuters on Tuesday, Haas reportedly said that ARM is committed to a stock market float in 2023.

But British hopes of a dual listing in both New York and London remain undecided at this time. Japanese owner SoftBank has repeatedly made clear its intention for a US listing, but London is hoping to convince SoftBank senior management to also list on the London Stock Exchange.

British overtures

Indeed, the Guardian (citing the Sunday Times) reported earlier this week that the City of London watchdog is considering easing listing rules in an attempt to win the $40bn (£34bn) listing.

Officials were said to be locked in talks in a last-ditch attempt to persuade SoftBank to consider a dual listing on the London Stock Exchange alongside New York’s Nasdaq.

Last month it was revealed that Prime Minister Rishi Sunak had held a meeting with Rene Haas and SoftBank’s founder and chief executive Masayoshi Son, in a fresh attempt to convince ARM and SoftBank to apply for a public listing in London.

To some that attempt seems to be a long shot after the $40bn sale of ARM to GPU powerhouse Nvidia was called off in February 2022, due to “significant regulatory challenges”.

The UK government had led that global challenge to the deal, and indicated it would block it on national security grounds.

Soon after the Nvidia deal fell through, Masayoshi Son in February 2022 indicated that the US Nasdaq would be the most likely listing destination for ARM.

The head of Japan’s SoftBank then reiterated this stance in June 2022.

UK officials and LSE executives thus face an uphill struggle to persuade SoftBank because of the higher cost and complexity of such a move.

Dual listed

ARM was formed in 1990 when it was spun out of Acorn Computers, and its chip designs are used in 95 percent of smartphones due to their low power consumption.

This makes ARM a major force in the semiconductor market, and it licensing its designs to some of the world’s largest consumer tech manufacturers including Qualcomm and Apple.

Japan’s SoftBank had acquired ARM for $32bn in 2016.

Before that, ARM was actually dual-listed in London and New York until the 2016 SoftBank acquisition – an acquisition the UK government at the time welcomed, despite concern at ARM falling into the hands of a foreign entity.

IPO in 2023

Now in a Reuters interview, Rene Haas has indicated the British chip designer will likely list in 2023.

“The plans are actually fairly well developed and underway now,” Haas told Reuters, after ARM’s corporate parent reported its fourth straight quarter of losses. “We’re doing everything we can and are committed to have it happen this year.”

ARM’s fiscal third quarter sales were reportedly up 28 percent to $746 million, one of the few growth areas for Softbank.

Under the leadership of Haas, ARM has been seeking to expand ARM’s push into other markets such as data centre servers, and those efforts helped boost upfront license revenue 65 percent to $300 million as ARM signed new deals in cloud computing and other segments.

AM said per-chip royalties, which are steadier than its deal-making business, were up 12 percent to $446 million in the quarter. That growth came amid a slowdown in the smartphone business that dragged down results at Apple and Qualcomm.

According to Reuters, Haas said ARM is “not immune” to the softening smartphone market but that the company has licensed more intellectual property into each chip than in the past.

With the most advanced phone chips now using 10 to 12 computing cores along with the newest version of ARM’s computing architecture, he said that translates into higher royalties for each chip sold.

“The diversification that we’ve done and, in core markets, just having more technology in the chips means that we’ve been able to withstand the downturn better than most,” Haas reportedly said.