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.
AI REVOLUTION: The event is to take place from Wednesday to Friday at the Taipei Nangang Exhibition Center’s halls 1 and 2 and would feature more than 1,100 exhibitors Semicon Taiwan, an annual international semiconductor exhibition, would bring leaders from the world’s top technology firms to Taipei this year, the event organizer said. The CEO Summit is to feature nine global leaders from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), ASE Technology Holding Co (ASE, 日月光投控), Applied Materials Inc, Google, Samsung Electronics Co, SK Hynix Inc, Microsoft Corp, Interuniversity Microelectronic Centre and Marvell Technology Group Ltd, SEMI said in a news release last week. The top executives would delve into how semiconductors are positioned as the driving force behind global technological innovation amid the artificial intelligence (AI) revolution, the organizer said. Among them,
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
RSS