British chip designer Arm Ltd, backed by Softbank Group Corp, is in talks with potential strategic investors including Intel Corp to anchor what is expected to be one of the largest initial public offerings (IPOs) of the year, people familiar with the matter said.
Arm has held talks with other companies about participating in the IPO, the people said, asking not to be identified because the matter is private.
The talks are early and could still fall apart ahead of the listing, the people added.
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It is also unclear how much would be invested in Arm or what the structure would be.
Arm is looking to raise as much as US$10 billion in its listing in New York later this year, Bloomberg News previously reported.
Representatives for Intel and Arm declined to comment.
Bringing on an anchor investor in an IPO can help drum up interest and momentum, especially in a rough market for new listings. If the talks succeed, Intel would eventually be listed in Arm’s IPO prospectus ahead of the listing.
Anchor investors buying US$100 million to US$200 million worth of shares have been popular for semiconductor-related IPOs in the past few years. Growth equity firm General Atlantic invested about US$100 million in Intel-backed Mobileye Global Inc’s IPO last year, while Qualcomm Inc backed GlobalFoundries Inc’s listing in 2021.
A key part of Intel chief executive officer Pat Gelsinger’s push to return the company to the pinnacle of the semiconductor industry is a plan to open up its factories to other firms, even rivals. If he is to be successful in competing with Taiwan Semiconductor Manufacturing Co (台積電) in outsourced production, Intel would have to produce chips that contain Arm’s widely used technology.
The two have already announced a technical tie-up. Arm’s designs and industry-standard instruction set are used in everything from Broadcom Inc networking chips to Apple Inc processors in the iPhone and Macs to Qualcomm Inc’s ubiquitous chips for mobile phones.
By taking a position in Arm, whose technology has enabled direct competition for Intel’s processors, Gelsinger might be seeking to show his commitment to Arm and to embracing that openness. Throughout its more than 50-year history, Intel’s plants have almost exclusively worked on its own designs.
Softbank founder Masayoshi Son has said he hopes the Arm IPO can be the largest ever by a chip company.
Arm’s valuation still has not been set and the company could be valued anywhere from US$30 billion to US$70 billion, Bloomberg News previously reported.
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