Much-anticipated plans to list the British chip designer Arm Ltd on the stock exchange have been delayed by managers who fear the global economic downturn and a slump in tech shares could spook potential investors.
The Cambridge-based company wrote to private shareholders a few days ago, saying the initial public offering (IPO), which could value the company at up to US$40 billion, would not take place until well into next year.
The company was widely expected to float as soon as the first quarter of next year.
The delay would raise anxiety among UK ministers, who have lobbied the company to list on the London Stock Exchange to help secure the city’s reputation as a potential destination for high-profile tech IPOs over rivals.
“Clearly, we want to IPO as soon as possible. But given the current global economic uncertainty, given the state of financial markets, that’s probably now unlikely to happen before the end of March 2023,” Arm’s head of investor relations Ian Thornton told investors.
“However, preparations for the IPO are going very well. They’re advanced. And we are fully committed to floating sometime in 2023,” he added.
A spokesperson for Arm confirmed the delay.
The delay was first reported by the Mail on Sunday.
Analysts have previously estimated that Arm — whose chip designs are used by more than 500 clients, including Apple Inc, Samsung Electronics Co and Google, in products ranging from tablet computers and mobile phones to cars and smart TVs — could be worth up to US$40 billion when it goes public.
However, shares in big tech companies, including Facebook owner Meta Platforms Inc, Google’s parent company Alphabet Inc and Amazon.com Inc have slumped this year, amid fears that surging inflation, rising interest rates and economic uncertainty would hit consumer demand and advertising revenues.
Those same conditions, sparked by Russia’s invasion of Ukraine and a subsequent rise in energy prices, have raised concerns about a global economic downturn. The Office for Budget Responsibility last week said that the UK had already fallen into a recession that would last more than a year, and push half a million people out of work.
The delay to Arm’s IPO plans would put additional pressure on its owner, Softbank Group Corp, which bought the chip company for US$32 billion in 2016, but has suffered from a string of bad investments.
This summer, it emerged that then-British prime minister Boris Johnson joined lobbying efforts already under way by London Stock Exchange executives, government departments and senior officials to try to persuade Arm to float its shares in London.
Liz Truss attempted to revive those discussions before she resigned last month from her short-lived tenure as Johnson’s successor.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to