LAGOS, Nigeria (VOICE OF NAIJA) – Fierce competition among prominent tech giants, including Apple, Amazon, Intel, Nvidia, Alphabet, Microsoft, Samsung Electronics, and TSMC, to secure shares in Arm Holdings’ upcoming initial public offering (IPO) is putting the semiconductor designer’s commitment to neutrality in the chip industry to the test.
Arm, aiming for a valuation of up to $70 billion for its IPO on the Nasdaq next month, is attracting these clients eager to enhance their ties with Arm and prevent rivals from gaining an advantage, as insiders familiar with the talks have revealed.
Arm’s semiconductor designs are regarded as crucial by its customers, used by over 260 tech companies to manufacture more than 30 billion chips yearly, powering a vast range of devices from smartphones to supercomputers.
Although an IPO investment wouldn’t confer board influence or strategy input, it could strengthen bonds with participating companies and create a barrier against potential Arm acquisitions by competitors.
READ ALSO: Apple, Samsung, Others Set To Invest In Arm’s IPO – Report
Arm and SoftBank Group have earmarked 10% of IPO shares for their clients, resisting calls for greater allocations to maintain stock liquidity, given that only a 10% stake in Arm will be available in the IPO.
These details spotlight how Arm’s neutral status remains a point of contention, particularly due to SoftBank’s IPO pursuit after a failed attempt to sell Arm to Nvidia last year due to antitrust concerns raised by other chip maker clients.
Apple and Samsung are among Arm’s major clients considering IPO investments, seeking to solidify their technological autonomy and lower production costs.
Intel is also exploring closer ties with Arm, given its foray into chip manufacturing to compete with TSMC.
Amazon, Alphabet, and Microsoft are eyeing the IPO as a means to expand their hardware development and self-sufficiency in chip production.
However, the certainty of these investments remains uncertain, with SoftBank valuing Arm at $64 billion recently and some companies potentially hesitating at the projected valuation.