Arm manufactures chips based on Arm architecture, which power the most widely used consumer electronics devices, most notably smartphones, tablets, computers and wearables. Reuters
Arm manufactures chips based on Arm architecture, which power the most widely used consumer electronics devices, most notably smartphones, tablets, computers and wearables. Reuters
Arm manufactures chips based on Arm architecture, which power the most widely used consumer electronics devices, most notably smartphones, tablets, computers and wearables. Reuters
Arm manufactures chips based on Arm architecture, which power the most widely used consumer electronics devices, most notably smartphones, tablets, computers and wearables. Reuters

SoftBank's Arm prepares for potential top-ranking tech IPO


Alvin R Cabral
  • English
  • Arabic

SoftBank Group's British semiconductor unit Arm is stirring a buzz with its potential blockbuster initial public offering in September, which could be the technology sector's third biggest listing of all time and the largest IPO in the US this year.

Interest is growing as the company prepares to hold roadshows next month for the IPO, reported to value the company between $60 billion and $70 billion. Arm has provided more insight in a prospectus it submitted to the US Securities and Exchange Commission this week.

What is Arm?

Arm manufactures chips based on Arm architecture, which powers the most widely used consumer electronics devices, most notably smartphones, tablets, computers and wearables.

The advantages of Arm-based chips include low-power consumption, faster performance, power efficiency and cost-effectiveness to manufacture. Their small size and scaleability enable them to be used in a wide variety of devices, from wearables to servers.

More than 250 billion chips made by the company are embedded in devices globally, and about 70 per cent of the world's population uses Arm-based technology across all markets, according to its website.

In June, Masayoshi Son, the chairman and chief executive of SoftBank, projected this figure to hit one trillion.

Where would Arm's IPO rank all-time?

If Arm is able to raise a projected $10 billion on its debut, it would be ranked the third highest tech IPO ever, behind only Meta Platforms' (then Facebook) $16 billion in 2012 and Alibaba's chart-topping $25 billion in 2014.

If IPOs from all industries are to be considered, Arm's listing would be in the top 20, data from Statista shows. Saudi Aramco's $25.6 billion IPO in 2019 remains the all-time leader.

That being said, it's also notable that it's been practically a decade since a tech IPO of this magnitude has emerged, and could possibly boost the market.

Why is Arm's IPO key?

Arm is banking on two growing sectors: data centres and artificial intelligence, which has shot up in popularity as of late.

The company aims to focus less on the lagging smartphone market and target customers that make chips for data centres, which are increasingly integrating AI capabilities. Arm says its energy-efficient technology is a good fit for data centres that consume considerable amounts of power.

"As the world moves increasingly towards AI and ML-enabled computing, Arm will be central to this transition ... In the emerging area of large language models, generative AI and autonomous driving, there will be a heightened emphasis on the low power acceleration of these algorithms," Arm said in its prospectus.

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Arm said it is working with top companies, including Google parent Alphabet, Facebook owner Meta Platforms, Mercedes-Benz, self-driving car maker Cruise and Nvidia to deploy Arm technology to run AI workloads.

Arm can also take a page out of Nvidia's playbook: having tapped into AI early on, it now enjoys a trillion-dollar market capitalisation. Earlier this month, Nvidia introduced its updated generative AI-focused GH200 Grace Hopper "superchip", which is based on Arm architecture.

Which companies are interested in the IPO?

Apple and Samsung are among big-ticket technology companies that are expected to invest in Arm's IPO, and the world's biggest mobile phone manufacturers will be joined by tech majors Intel and Nvidia, the Nikkei reported earlier this month.

Cambridge-based Arm intends to sell "stakes of a few per cent each" to big chipmakers to make them medium to long-term shareholders, a move meant to "stabilise the stock price at the time of the listing", it said.

Who are Arm's clients?

Some of the world's biggest technology companies are clients of Arm, including fellow chip-makers, those in the automotive industry and Internet of Things.

According to Arm's prospectus, more than 260 companies reported that they had shipped about 30.6 billion Arm-based chips in its fiscal year ended March 31, 2023, including bellwethers Amazon and Alphabet.

In the semiconductor sphere, Arm's client base includes major players Advanced Micro Devices, Intel, Nvidia, Samsung Electronics and Qualcomm.

Arm pointed to the history of tech advancements as the reason for the growth of its reach, from people having just a PC at home decades ago to the advent of smartphones in users' pockets and the arrival of smart cars and connected devices.

"Each of these computers needs at least one CPU, and in many cases more than one. This trend has driven the dramatic growth of Arm-based chips over the past several years," it said.

How has Arm performed financially?

In its fiscal year 2023, which ended in March, Arm said net income declined 4.6 per cent to $524 million, according to its prospectus. However, in fiscal year 2022, net income soared nearly 42 per cent to $549 million.

Revenue for 2023 marginally declined 0.7 per cent to less than $2.7 billion. In fiscal 2022, Arm's revenue surged by a third to a little over $2.7 billion.

The performance of Arm and other chip manufacturers have been tied to industry trends.

The overall semiconductor industry enjoyed a record 2021 that saw sales rising 26 per cent to $556 billion, on 1.15 trillion units shipped, data from the Semiconductor Industry Association had shown.

However, it has been battling a downturn, weighed down by inflation and recession worries in 2022 that weakened consumer demand, resulting in a glut of chip supply that has affected prices.

Demand for AI chips is likely to revive demand in the industry, and with generative AI making waves, this could bode well for the prospects of Arm and its peers.

Are there risks for Arm?

Despite all the hype, Arm has acknowledged certain risks to its business. Among these are the uncertain trends and demands in the chip industry, "intense" competition and the possibility of losing market share, it said in its prospectus.

"If we fail to develop new products in response to, or in anticipation of, rapid technological changes in our industry or the industries we serve, our business may be materially and adversely affected."

MATCH INFO

Delhi Daredevils 174-4 (20 ovs)
Mumbai Indians 163 (19.3 ovs)

Delhi won the match by 11 runs

Which honey takes your fancy?

Al Ghaf Honey

The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year

Sidr Honey

The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest

Samar Honey

The Samar tree trunk, leaves and blossom contains Barm which is the secret of healing. You can enjoy the best types of honey from this tree every year in May and June. It is an historical witness to the life of the Emirati nation which represents the harsh desert and mountain environments

In numbers

1,000 tonnes of waste collected daily:

  • 800 tonnes converted into alternative fuel
  • 150 tonnes to landfill
  • 50 tonnes sold as scrap metal

800 tonnes of RDF replaces 500 tonnes of coal

Two conveyor lines treat more than 350,000 tonnes of waste per year

25 staff on site

 

UAE players with central contracts

Rohan Mustafa, Ashfaq Ahmed, Chirag Suri, Rameez Shahzad, Shaiman Anwar, Adnan Mufti, Mohammed Usman, Ghulam Shabbir, Ahmed Raza, Qadeer Ahmed, Amir Hayat, Mohammed Naveed and Imran Haider.

 

 

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ICC Women's T20 World Cup Asia Qualifier 2025, Thailand

UAE fixtures
May 9, v Malaysia
May 10, v Qatar
May 13, v Malaysia
May 15, v Qatar
May 18 and 19, semi-finals
May 20, final

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RACECARD

4.30pm Jebel Jais – Maiden (PA) Dh60,000 (Turf) 1,000m
5pm: Jabel Faya – Maiden (PA) Dh60,000 (T) 1,000m
5.30pm: Al Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 2,200m
6pm: The President’s Cup Prep – Conditions (PA) Dh100,000 (T) 2,200m
6.30pm: Abu Dhabi Equestrian Club – Prestige (PA) Dh125,000 (T) 1,600m
7pm: Al Ruwais – Group 3 (PA) Dh300,000 (T) 1,200m
7.30pm: Jebel Hafeet – Maiden (TB) Dh80,000 (T) 1,400m

The biog

Favourite book: Homegoing by Yaa Gyasi

Favourite holiday destination: Spain

Favourite film: Bohemian Rhapsody

Favourite place to visit in the UAE: The beach or Satwa

Children: Stepdaughter Tyler 27, daughter Quito 22 and son Dali 19

T20 World Cup Qualifier fixtures

Tuesday, October 29

Qualifier one, 2.10pm – Netherlands v UAE

Qualifier two, 7.30pm – Namibia v Oman

Wednesday, October 30

Qualifier three, 2.10pm – Scotland v loser of qualifier one

Qualifier four, 7.30pm – Hong Kong v loser of qualifier two

Thursday, October 31

Fifth-place playoff, 2.10pm – winner of qualifier three v winner of qualifier four

Friday, November 1

Semi-final one, 2.10pm – Ireland v winner of qualifier one

Semi-final two, 7.30pm – PNG v winner of qualifier two

Saturday, November 2

Third-place playoff, 2.10pm

Final, 7.30pm

Ms Yang's top tips for parents new to the UAE
  1. Join parent networks
  2. Look beyond school fees
  3. Keep an open mind
Results

2.30pm: Expo 2020 Dubai – Conditions (PA) Dh80,000 (Dirt) 1,600m; Winner: Barakka, Ray Dawson (jockey), Ahmad bin Harmash (trainer)

3.05pm: Now Or Never – Maiden (TB) Dh82,500 (Turf) 1,600m; Winner: One Idea, Andrea Atzeni, Doug Watson

3.40pm: This Is Our Time – Handicap (TB) Dh82,500 (D) 1,600m; Winner: Perfect Balance, Tadhg O’Shea, Bhupat Seemar

4.15pm: Visit Expo 2020 – Handicap (TB) Dh87,500 (T) 1,600m; Winner: Kaheall, Richard Mullen, Salem bin Ghadayer

4.50pm: The World In One Place – Handicap (TB) Dh95,000 (T) 1.900m; Winner: Castlebar, Adrie de Vries, Helal Al Alawi

5.25pm: Vision – Handicap (TB) Dh95,000 (D) 1,200m; Winner: Shanty Star, Richard Mullen, Rashed Bouresly

6pm: Al Wasl Plaza – Handicap (TB) Dh95,000 (T) 1,200m; Winner: Jadwal, Dane O’Neill, Doug Watson

The specs

Engine: Turbocharged four-cylinder 2.7-litre

Power: 325hp

Torque: 500Nm

Transmission: 10-speed automatic

Price: From Dh189,700

On sale: now

BUNDESLIGA FIXTURES

Friday (All UAE kick-off times)

Borussia Dortmund v Eintracht Frankfurt (11.30pm)

Saturday

Union Berlin v Bayer Leverkusen (6.30pm)

FA Augsburg v SC Freiburg (6.30pm)

RB Leipzig v Werder Bremen (6.30pm)

SC Paderborn v Hertha Berlin (6.30pm)

Hoffenheim v Wolfsburg (6.30pm)

Fortuna Dusseldorf v Borussia Monchengladbach (9.30pm)

Sunday

Cologne v Bayern Munich (6.30pm)

Mainz v FC Schalke (9pm)

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

THE BIO

Born: Mukalla, Yemen, 1979

Education: UAE University, Al Ain

Family: Married with two daughters: Asayel, 7, and Sara, 6

Favourite piece of music: Horse Dance by Naseer Shamma

Favourite book: Science and geology

Favourite place to travel to: Washington DC

Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.

Skoda Superb Specs

Engine: 2-litre TSI petrol

Power: 190hp

Torque: 320Nm

Price: From Dh147,000

Available: Now

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Updated: September 25, 2023, 9:17 AM