16 ms·

Arm Announces Public Filing for Proposed Initial Public Offering

308 points by lultimouomo 3y ago

LoveMortuus 3y ago
I was unable to find the information, does anyone if you know if they'll pay out dividends?
scrlk 3y ago
F-1: https://www.sec.gov/Archives/edgar/data/1973239/000119312523216983/d393891df1.htm https://www.sec.gov/Archives/edgar/data/1973239/000119312523...
- bunnie 3y ago
  Total revenue: 2.679bb Gross profit: 2.573bb (page 18, FY2023) 96% gross profit margin? Ahh to be an IP licensing company....why would anyone invest in building physical things when there are opportunities like this out there! </s> edit: clarify gross profit margin
  - ppaattrriicckk 3y ago
    Small correction: Net income: 0.524 bb So 19.6% profit margin. Still nice.
    - bunnie 3y ago
      I'm not an accountant, but I think I'm referring to gross profit margin [1], which is revenue minus cost of goods sold (which is small for an IP licensing company, any company that actually sells hardware will be a fraction of that). I think your math refers to operating margin, that's after they subtract all the operating overheads which are fixed, and not proportional to sales volume. In other words a 96% gross margin means they have virtually no friction to increasing sales. Compare to Intel statement [2], they have a 35.8% gross margin and a negative operating margin this year, which would be the apples to apples comparison against 96% gross margin and 19.6% operating margin in the F1. My read on the income line is they do a good job of 'spending money', but they are signaling that can be turned into things like dividends to shareholders once they IPO, perhaps by doing short sighted things like cutting R&D expenses and/or accounting tricks. [1] https://en.m.wikipedia.org/wiki/Gross_margin https://en.m.wikipedia.org/wiki/Gross_margin [2] https://www.intc.com/news-events/press-releases/detail/1637/intel-reports-second-quarter-2023-financial-results https://www.intc.com/news-events/press-releases/detail/1637/...
      - redtriumph 3y ago
        in case, any one looking for F-1 (F1) for ARM, it is here. (S-1 is for domestic corporations and F-1 is for foreign ones) https://www.sec.gov/Archives/edgar/data/1973239/000119312523216983/d393891df1.htm https://www.sec.gov/Archives/edgar/data/1973239/000119312523...
- moconnor 3y ago
  The "risks" section is pretty interesting, e.g.: "Arm China is 25% of our revenue, but we have no control over them, they have failed to pay us in the past resulting in us taking on additional costs to recover the money, also we have no way of knowing what they actually owe us and other than what they say, which has already been a problem"
  - user20230822 3y ago
    How do they manage IP if they have no control over them? I see a pretty big issue
    - moconnor 3y ago
      According to the filing they have extremely limited ability to influence them and yeah it is a big issue.
      - NickC25 3y ago
        Which is terrifying - ARM's biggest risk in that regard is that ARM China can effectively shoot itself in the foot in the name of Chinese strategic/geopolitical/technological interests, and all their Chinese employees will have absolutely nothing to worry about.
      - meragrin_ 3y ago
        I wonder if it would have been better for Nvidia to have bought ARM. Nvidia's cards might have been sufficient influence.
    - Havoc 3y ago
      They don’t. They’re proper rogue and being China there isn’t much you can do about it
  - puzzlingcaptcha 3y ago
    The "ARM China going rogue" story is so weird. Although supposedly Softbank restored control last year? [1] So I don't know where things stand at the moment. https://asia.nikkei.com/Spotlight/Caixin/In-Depth-How-SoftBank-wrested-back-control-of-Arm-China https://asia.nikkei.com/Spotlight/Caixin/In-Depth-How-SoftBa...
- wslh 3y ago
  RISC-V is in the prospectus as a risk. Good for RISC-V!
  - phkahler 3y ago
    >> RISC-V is in the prospectus as a risk. One option is to embrace it as an opportunity. ARM designs some pretty good CPU cores, so imagine they offered good RISC-V cores as well. RISC-V can be free, but a lot of companies still license core designs.
    - RetroTechie 3y ago
      There's another option: For a SoC (or bigger uC) include both ARM & RISC-V cores. They can work side by side, be used as development platform for either, share memory or peripherals included in the SoC (or perhaps share different but overlapping subsets of those resources). Or a Big.Little style setup where the "Big" and "Little" are different ISA. Where utilising chip resources 100% is not too important (like, in most applications), designers could simply work with the ISA cores they're comfortable with. Switch use to the other cores, use the same peripherals. Would this be difficult to work with? Unlikely. Software support for such setups exists, suitable defaults / boot settings & go. At the very least this would get ARM foot in the door if it turns out RISC-V eating ARMs market share (which is already happening, be it limited scale so far). Or collect the 'ARM tax' for SoCs whose designers wanted RISC-V but don't mind including ARM as well.
    - snvzz 3y ago
      >ARM designs some pretty good CPU cores, so imagine they offered good RISC-V cores as well. This is the approach MIPS took. They deprecated their legacy ISA, embracing the industry-standard RISC-V. Problem is, ARM's management hasn't shown any signs of actually being capable of doing this. It would have to be replaced, and the business model would need a deep redesign. But everything hardware takes a long time. Can ARM survive until they have competitive RISC-V designs ready? I will not bet on that.
simonebrunozzi 3y ago
Interesting. As much as ARM-based processors are doing so well in the market, it's important to understand that ARM has specific licensing agreements with Apple, Samsung, etc. It is not so obvious that it will continue being a cash cow for many more years.
- tchaffee 3y ago
  Well no one can predict the future but what's your reasoning that such an important technology partner to such massive companies will all of a sudden stop innovating and become less significant?
  - flkenosad 3y ago
    Intel was also an important partner to Apple at one point.
    - tchaffee 3y ago
      Intel is still around, still innovating, and still profitable. It has a lot more competition than in the past, but they are still a force to be reckoned with.
    - meepmorp 3y ago
      Apple never had the ability to develop custom x86 chips in house and were constantly at the mercy of Intel's timelines and product development priorities, as well as their extended issues shrinking their lithography below 14nm. ARM presents none of those issues for Apple - now they handle the design of their CPUs, prioritize whatever they want, and fab however many they need directly from whoever using newer processes that Intel still hasn't matched yet.
- grumple 3y ago
  I expect that some of those companies will be interested in acquiring shares of the company to ensure their continued access and innovation.
afandian 3y ago
"250 billion chips" I wonder how many of those are buried in landfill now.
- not_your_vase 3y ago
  Many. And still, many more are bought up every year. Those small M0 and M0+ cost pennies... if you made all chopsticks in the world out of M0s instead of wood, it would be more cost effective lol (okay, maybe this is an exaggeration, but these small things are pretty much everywhere... not even speaking about chips in other, more complex devices)
  - afandian 3y ago
    Well thank goodness for RoHS!
- KirillPanov 3y ago
  Only the ones with locked^H^H^H^Hsecure bootloaders. In other words, nearly all of them. I've started calling it "Landfill Boot".
- bloggie 3y ago
  Certainly quite a few, there are ARM chips in single-use products such as COVID tests.
- mastax 3y ago
  I remember there was a disposable COVID test that had an arm processor in it.
  - tmoertel 3y ago
    I think that the price of those tests was about $70 each, however.
Thev00d00 3y ago
Bit of a downer for the UK to see them list in the US, I do understand they just want access to the most capital, but I find a shame LSE is not competitive for this kind of thing.
- blitzar 3y ago
  You can not trade LSE stocks on zero commision US apps, thus you can not become a meme stonk.
- tomatocracy 3y ago
  I don't think it's about lack of capital but higher valuations. For reasons which don't seem to be well understood, investors on US markets seem to be willing to bid higher multiples than investors on UK and most other markets.
  - kypro 3y ago
    More liquidity. No stamp duty on share purchases. Prices denominated in the world's reverse currency. Access to the largest market institutional investors.
  - 3cats-in-a-coat 3y ago
    Markets are more accessible and more popular to retail. Retail is stupid. Case in point: Tesla.
- TheFattestNinja 3y ago
  I know this is probably not the cause, and maybe it's just me being a naive SJW, but in my view London's financial institutions lost 90% of their credibility capital recently not so much because of Brexit (which hit them too) but because of the whole LME Nickel trade rollbacks shenanigans. Yes I know LME != LSE, and I know it was a lose-lose situation, but they co-exist and as a person who is not into finance they share their credibility to an extent.
- SilverBirch 3y ago
  It's been a topic for quite a while that UK regulations mean pension funds don't invest as much in equities and as a result there's not a huge amount of liquidity available to dump into stocks on the London Stock Exchange. They are working on trying to fix this though (slowly).
senttoschool 3y ago
During the height of the covid tech bubble, Nvidia offered to buy ARM for $40b. Right now, Softbank wants a $60b - $70b valuation when many tech stocks have lost 90%+ and some large caps have lost 30% - 50%. What justifies such crazy increase in value? Also, I believe Nvidia overpaid for the company regardless. Nvidia was willing to pay $40b because they want a world-class CPU design team to integrate their GeForce IP into SoCs and service chips. But a standalone ARM is not very valuable. The reason is that ARM's business model (licensing core designs and ISA) makes peanuts compared to Qualcomm, Apple, Intel, AMD, etc. In addition, ARM's biggest customers are also their biggest competitors. For example, Apple competes with stock ARM designs with Apple Silicon. Qualcomm will be competing with ARM designs via Nuvia chips. Ampere Computing just designed a custom ARM core of their own. When ARM only license the ISA (Apple Silicon, Nuvia, and Ampere One), they make peanuts. When they license ARM core designs, they make slightly more than peanuts. It's generally not a good business to invest in. I find it hard to justify the $60b - $70b valuation. No doubt Softbank will try to sell ARM as an AI company. It's not.
- kmlx 3y ago
  > It's generally not a good business to invest in. i agree. > Arm reported $524 million in net income on $2.68 billion in revenue in its fiscal 2023, which ended in March i find the current valuation ludicrous, and it seems like it's pushed more by Softbank's Vision Fund than a firm grasp in reality.
  - senttoschool 3y ago
    >Arm reported $524 million in net income on $2.68 billion in revenue in its fiscal 2023, which ended in March >i find the current valuation ludicrous, and it seems like it's pushed more by Softbank's Vision Fund than a firm grasp in reality. Just for comparison, AMD, which is still quite small, gets about $2b - $4b annual net profit. Intel, before their recent disaster quarters, had as much as $24b in annual net profit. $524m in net income is peanuts compared to the big boys. This is what I was saying in my original post. ARM is a more valuable company if they were acquired by Nvidia. As a standalone company, it's not that great. Again, a weird quirk of ARM is that their biggest customers are also their biggest competitors. This puts a cap on how much profit they can make. If ARM decides to raise licensing fees exponentially, which is likely not simple due to long-term contracts, then companies will seriously look to RISC-V. Because ARM is the smallest fish in the pond, it can't pay for the best engineers. The best chip engineers will go to AMD, Intel, Nvidia, Apple, Qualcomm, and startups. ARM is where these companies go to poach.
cgeier 3y ago
It feels strange to call it in "Initial Public Offering" when the company used to be public ten years ago.
- jwestbury 3y ago
  Should it be an APO? Additional Public Offering?
  - larvaetron 3y ago
    SPO: Subsequent Public Offering
  - offices 3y ago
    It's just an IPO. The history doesn't matter.
- _xivi 3y ago
  It's a sequel
- phkahler 3y ago
  IPO stands for "Infusion of Public Overspending". It's an exit strategy for private equity and VC, so more of an ending than anything "initial".
sschueller 3y ago
How long until Apple does a hostile takeover? /s I assume regulators would block a hostile takeover like they would a regular buyout if there are concerns regarding market power?
- MikusR 3y ago
  Apple with their special license couldn't care less about ARM.
  - snvzz 3y ago
    >special license This idea that they have a special license keeps getting thrown about. But nobody has ever been able to provide any proof or otherwise reference a believable source. Until proven otherwise, it's a myth.
- senttoschool 3y ago
  Why would Apple ever want to own ARM? Their internal CPU design team is years ahead of the ARM team. Apple has an architectural license and doesn't care about ARM core designs. Quite honestly, ARM falling on its face hard is actually a benefit to Apple. That would mean that Apple Silicon and iPhone SoCs have less competition. Imagine if Qualcomm chips based on ARM designs are 5 years behind instead of the 2-3 years now. But the Nvidia + ARM combo made sense from a technical and strategic standpoint though.
  - klelatti 3y ago
    > But the Nvidia + ARM combo made sense from a technical and strategic standpoint though. Made sense for Nvidia. Not for other Arm customers.
    - justin66 3y ago
      ...because seriously, how many of those customers could ever possibly want to use Nvidia's graphics or AI silicon? That stuff is never going to fly.
klelatti 3y ago
I think in many ways Arm is (or should be) a sort of large 'Mittelstand' [1] business. Long term focus, independence, customer focus etc are key to the success of this type of business. Trouble is, its success and its sector has given it a profile that attracts attention from the likes of Softbank who have other ideas. A company doesn't need to have a Nvidia like P/E ratio to be successful. [1] https://en.wikipedia.org/wiki/Mittelstand https://en.wikipedia.org/wiki/Mittelstand
- phkahler 3y ago
  You may be right. In that case they should offer a dividend to attract the kind of investors who are not necessarily looking for big gains in the stock price, but want a nice stable return. ARM was a growth stock for decades, but that phase is over for them.
- sofixa 3y ago
  > A company doesn't need to have a Nvidia like P/E ratio to be successful. Absolutely true. Sadly nowadays, especially in the US, and especially in tech, unless the company is growing like crazy or massive, it's considered as insignificant and dimissed.
  - lotsofpulp 3y ago
    How are they “dismissed”? Are trading volumes or share prices for non crazy or massive companies too low?
  - JumpCrisscross 3y ago
    > especially in the US, and especially in tech, unless the company is growing like crazy or massive, it's considered as insignificant and dimissed Maybe in Silicon Valley, were decades of totem disdain for anything resembling a business education is starting to take its toll. For anyone with a financial background, slow-growing profitable companies are most American industry. If you want to grow slowly (or barely at all), and want investors who like that, offer a dividend and price at a reasonable P/E.
  - vikramkr 3y ago
kriro 3y ago
I'm pretty sure it's going to be one of these companies that I don't invest in for reasons that sound logical to me (a big part of the company just splitting in China basically rogue + my personal view that RISC-V will gain traction due to the licencing policies of ARM) that will do very well :D
amiga1200 3y ago
I’m glad that RISC-V SBCs are starting to become usable.
- surajrmal 3y ago
  Depends on what you mean by usable. If you don't need long term support, strong software ecosystem support, and performance parity, it's great. It'll be a few more years before everything comes together, but hopefully not too many.
  - snvzz 3y ago
    >If you don't need Reads like FUD, as you go on to list a bunch of items that RISC-V actually already delivers. Point per point: >long term support Is achieved via upstreaming drivers[0] and providing documentation[1], something that e.g. StarFive is doing much better than Raspberry Pi ever has. >strong software ecosystem support RISC-V is rapidly building the strongest ecosystem. >performance parity JH7110 SoC used in boards like VisionFive 2 provides CPU performance between Raspberry Pi 3b and 4, at much lower power consumption. TH1520 SoC used in boards like Sipeed Lichee Pi4A[2] provides performance above Raspberry Pi 4. Both SoCs provide faster GPU (JH7110 is 4x that of Pi 4, TH1520 is faster), better hardware video codec blocks, cryptography acceleration, faster memory interface, faster I/O outside of the SoC and otherwise better and more built in peripherals. Note: Raspberry Pi have been used as reference points as they are, by far, the most popular ARM SBCs. >It'll be a few more years As proven above, it's already there against the Raspberry Pi line. But next year it'll be better, as RISC-V will finally compete with the fastest cores available. This is based solely on what's already announced (Ascalon, Veyron, P570 and so on). RISC-V enables the best processors. 0. https://rvspace.org/en/project/JH7110_Upstream_Plan https://rvspace.org/en/project/JH7110_Upstream_Plan 1. https://doc-en.rvspace.org/index.html https://doc-en.rvspace.org/index.html 2. https://news.ycombinator.com/item?id=37201754 https://news.ycombinator.com/item?id=37201754
  - themiddleupper 3y ago
    The RISC V fanboism is rampant here with bunch of them repeating their marketing slogan in the comments. There is nothing inevitable about RISC V. If anything it has lot of mountains to climb before it can be considered a challenge to the existing instruction set. It may or it may not do that. Being open does not automagically make it happen.
S_A_P 3y ago
I’m curious and haven’t seen anything regarding the ip theft of ARM by (???). Didn’t the Chinese arm of the business get taken over in some way? It made the news a few years back and nothing ever came out of it.
- nocoiner 3y ago
  The Chinese subsidiary basically declared independence. Last I saw the two sides were at an impasse, and the Chinese sub was continuing to do its own thing - ARM parent appeared clearly to have the law and the facts on its side, but without the ability to enforce a foreign law judgment or get into an unbiased local court, what are you going to do? Forget it, Jake. It’s China.
manvillej 3y ago
and so we watch, 1 more tech company, approach its demise through the unending undereducated pressures of the market
BooneJS 3y ago
The world is so dependent upon ARM’s designs, yet their revenue is relatively small. Public companies are expected to grow year after year after year. It will be interesting to see how they do that without becoming a competitor to their customers. I wish them good luck!
unethical_ban 3y ago
I don't understand what ARM does. They have designed a processor architecture that is RISC-style. For some companies, ARM sells the design and others manufacture the chip. So what do Apple and Qualcomm get out of it, if they design their own architecture? Is apple tacking on proprietary extensions or instructions? Why didn't apple design a CPU architecture from the ground up ala RISC-V?
- snvzz 3y ago
  Your confusion seems to have to do with microarchitecture vs ISA. An ISA is the Instruction Set Architecture, the interface between software and hardware. A microarchitecture is a hardware implementation of an ISA. RISC-V is an ISA. ARM is a company that has both an ISA (actually several, but their current is ARMv9) and a bunch of microarchitectures. Their business model is to license their IP: - They may license you a microarchitecture, so that you can include it in your chip's design. - They may license you the ISA, so you can implement your own microarchitecture for the ISA. Note that you can't then license your microarchitecture to others, that's ARM's sole privilege. RISC-V's instruction space has some room for custom extensions. Thus it can be adapted to find specific needs, without asking for permission nor opting out of the strongest software ecosystem which RISC-V is rapidly building. But while RISC-V is pretty good technically, enabling the best processors, what's most disruptive is that it is an open ISA. It means there's now an open market with RISC-V microarchitectures to license, from a range of vendors. There's also some open source microarchitectures. Microarchitecture licensing aside, there's an ecosystem of companies offering related services, such as helping you verify your designs, trace your code and so on.
justin66 3y ago
From the recent FT article: “Despite our significant reliance on Arm China through our commercial relationship with them, both as a source of revenue and as a conduit to the important [Chinese] market, Arm China operates independently of us,” the prospectus warned, adding that Arm did not have any direct management rights or the right to representation on Arm China’s board.
peoplearepeople 3y ago
Prediction: 5 years from now Apple announces moving to an internally developed RISC-V core for Apple Silicon

308 points by lultimouomo 3y ago

I was unable to find the information, does anyone if you know if they'll pay out dividends?

F-1: https://www.sec.gov/Archives/edgar/data/1973239/000119312523216983/d393891df1.htm https://www.sec.gov/Archives/edgar/data/1973239/000119312523...

bunnie 3y ago
Total revenue: 2.679bb Gross profit: 2.573bb (page 18, FY2023) 96% gross profit margin? Ahh to be an IP licensing company....why would anyone invest in building physical things when there are opportunities like this out there! </s> edit: clarify gross profit margin
- ppaattrriicckk 3y ago
  Small correction: Net income: 0.524 bb So 19.6% profit margin. Still nice.
  - bunnie 3y ago
    I'm not an accountant, but I think I'm referring to gross profit margin [1], which is revenue minus cost of goods sold (which is small for an IP licensing company, any company that actually sells hardware will be a fraction of that). I think your math refers to operating margin, that's after they subtract all the operating overheads which are fixed, and not proportional to sales volume. In other words a 96% gross margin means they have virtually no friction to increasing sales. Compare to Intel statement [2], they have a 35.8% gross margin and a negative operating margin this year, which would be the apples to apples comparison against 96% gross margin and 19.6% operating margin in the F1. My read on the income line is they do a good job of 'spending money', but they are signaling that can be turned into things like dividends to shareholders once they IPO, perhaps by doing short sighted things like cutting R&D expenses and/or accounting tricks. [1] https://en.m.wikipedia.org/wiki/Gross_margin https://en.m.wikipedia.org/wiki/Gross_margin [2] https://www.intc.com/news-events/press-releases/detail/1637/intel-reports-second-quarter-2023-financial-results https://www.intc.com/news-events/press-releases/detail/1637/...
    - redtriumph 3y ago
      in case, any one looking for F-1 (F1) for ARM, it is here. (S-1 is for domestic corporations and F-1 is for foreign ones) https://www.sec.gov/Archives/edgar/data/1973239/000119312523216983/d393891df1.htm https://www.sec.gov/Archives/edgar/data/1973239/000119312523...
moconnor 3y ago
The "risks" section is pretty interesting, e.g.: "Arm China is 25% of our revenue, but we have no control over them, they have failed to pay us in the past resulting in us taking on additional costs to recover the money, also we have no way of knowing what they actually owe us and other than what they say, which has already been a problem"
- user20230822 3y ago
  How do they manage IP if they have no control over them? I see a pretty big issue
  - moconnor 3y ago
    According to the filing they have extremely limited ability to influence them and yeah it is a big issue.
    - NickC25 3y ago
      Which is terrifying - ARM's biggest risk in that regard is that ARM China can effectively shoot itself in the foot in the name of Chinese strategic/geopolitical/technological interests, and all their Chinese employees will have absolutely nothing to worry about.
    - meragrin_ 3y ago
      I wonder if it would have been better for Nvidia to have bought ARM. Nvidia's cards might have been sufficient influence.
  - Havoc 3y ago
    They don’t. They’re proper rogue and being China there isn’t much you can do about it
- puzzlingcaptcha 3y ago
  The "ARM China going rogue" story is so weird. Although supposedly Softbank restored control last year? [1] So I don't know where things stand at the moment. https://asia.nikkei.com/Spotlight/Caixin/In-Depth-How-SoftBank-wrested-back-control-of-Arm-China https://asia.nikkei.com/Spotlight/Caixin/In-Depth-How-SoftBa...
wslh 3y ago
RISC-V is in the prospectus as a risk. Good for RISC-V!
- phkahler 3y ago
  >> RISC-V is in the prospectus as a risk. One option is to embrace it as an opportunity. ARM designs some pretty good CPU cores, so imagine they offered good RISC-V cores as well. RISC-V can be free, but a lot of companies still license core designs.
  - RetroTechie 3y ago
    There's another option: For a SoC (or bigger uC) include both ARM & RISC-V cores. They can work side by side, be used as development platform for either, share memory or peripherals included in the SoC (or perhaps share different but overlapping subsets of those resources). Or a Big.Little style setup where the "Big" and "Little" are different ISA. Where utilising chip resources 100% is not too important (like, in most applications), designers could simply work with the ISA cores they're comfortable with. Switch use to the other cores, use the same peripherals. Would this be difficult to work with? Unlikely. Software support for such setups exists, suitable defaults / boot settings & go. At the very least this would get ARM foot in the door if it turns out RISC-V eating ARMs market share (which is already happening, be it limited scale so far). Or collect the 'ARM tax' for SoCs whose designers wanted RISC-V but don't mind including ARM as well.
  - snvzz 3y ago
    >ARM designs some pretty good CPU cores, so imagine they offered good RISC-V cores as well. This is the approach MIPS took. They deprecated their legacy ISA, embracing the industry-standard RISC-V. Problem is, ARM's management hasn't shown any signs of actually being capable of doing this. It would have to be replaced, and the business model would need a deep redesign. But everything hardware takes a long time. Can ARM survive until they have competitive RISC-V designs ready? I will not bet on that.

simonebrunozzi 3y ago

Interesting. As much as ARM-based processors are doing so well in the market, it's important to understand that ARM has specific licensing agreements with Apple, Samsung, etc. It is not so obvious that it will continue being a cash cow for many more years.

tchaffee 3y ago
Well no one can predict the future but what's your reasoning that such an important technology partner to such massive companies will all of a sudden stop innovating and become less significant?
- flkenosad 3y ago
  Intel was also an important partner to Apple at one point.
  - tchaffee 3y ago
    Intel is still around, still innovating, and still profitable. It has a lot more competition than in the past, but they are still a force to be reckoned with.
  - meepmorp 3y ago
    Apple never had the ability to develop custom x86 chips in house and were constantly at the mercy of Intel's timelines and product development priorities, as well as their extended issues shrinking their lithography below 14nm. ARM presents none of those issues for Apple - now they handle the design of their CPUs, prioritize whatever they want, and fab however many they need directly from whoever using newer processes that Intel still hasn't matched yet.
grumple 3y ago
I expect that some of those companies will be interested in acquiring shares of the company to ensure their continued access and innovation.

afandian 3y ago

"250 billion chips" I wonder how many of those are buried in landfill now.

not_your_vase 3y ago
Many. And still, many more are bought up every year. Those small M0 and M0+ cost pennies... if you made all chopsticks in the world out of M0s instead of wood, it would be more cost effective lol (okay, maybe this is an exaggeration, but these small things are pretty much everywhere... not even speaking about chips in other, more complex devices)
- afandian 3y ago
  Well thank goodness for RoHS!
KirillPanov 3y ago
Only the ones with locked^H^H^H^Hsecure bootloaders. In other words, nearly all of them. I've started calling it "Landfill Boot".
bloggie 3y ago
Certainly quite a few, there are ARM chips in single-use products such as COVID tests.
mastax 3y ago
I remember there was a disposable COVID test that had an arm processor in it.
- tmoertel 3y ago
  I think that the price of those tests was about $70 each, however.

Thev00d00 3y ago

Bit of a downer for the UK to see them list in the US, I do understand they just want access to the most capital, but I find a shame LSE is not competitive for this kind of thing.

blitzar 3y ago
You can not trade LSE stocks on zero commision US apps, thus you can not become a meme stonk.
tomatocracy 3y ago
I don't think it's about lack of capital but higher valuations. For reasons which don't seem to be well understood, investors on US markets seem to be willing to bid higher multiples than investors on UK and most other markets.
- kypro 3y ago
  More liquidity. No stamp duty on share purchases. Prices denominated in the world's reverse currency. Access to the largest market institutional investors.
- 3cats-in-a-coat 3y ago
  Markets are more accessible and more popular to retail. Retail is stupid. Case in point: Tesla.
TheFattestNinja 3y ago
I know this is probably not the cause, and maybe it's just me being a naive SJW, but in my view London's financial institutions lost 90% of their credibility capital recently not so much because of Brexit (which hit them too) but because of the whole LME Nickel trade rollbacks shenanigans. Yes I know LME != LSE, and I know it was a lose-lose situation, but they co-exist and as a person who is not into finance they share their credibility to an extent.
SilverBirch 3y ago
It's been a topic for quite a while that UK regulations mean pension funds don't invest as much in equities and as a result there's not a huge amount of liquidity available to dump into stocks on the London Stock Exchange. They are working on trying to fix this though (slowly).

senttoschool 3y ago

During the height of the covid tech bubble, Nvidia offered to buy ARM for $40b. Right now, Softbank wants a $60b - $70b valuation when many tech stocks have lost 90%+ and some large caps have lost 30% - 50%. What justifies such crazy increase in value? Also, I believe Nvidia overpaid for the company regardless. Nvidia was willing to pay $40b because they want a world-class CPU design team to integrate their GeForce IP into SoCs and service chips. But a standalone ARM is not very valuable. The reason is that ARM's business model (licensing core designs and ISA) makes peanuts compared to Qualcomm, Apple, Intel, AMD, etc. In addition, ARM's biggest customers are also their biggest competitors. For example, Apple competes with stock ARM designs with Apple Silicon. Qualcomm will be competing with ARM designs via Nuvia chips. Ampere Computing just designed a custom ARM core of their own. When ARM only license the ISA (Apple Silicon, Nuvia, and Ampere One), they make peanuts. When they license ARM core designs, they make slightly more than peanuts. It's generally not a good business to invest in. I find it hard to justify the $60b - $70b valuation. No doubt Softbank will try to sell ARM as an AI company. It's not.

kmlx 3y ago
> It's generally not a good business to invest in. i agree. > Arm reported $524 million in net income on $2.68 billion in revenue in its fiscal 2023, which ended in March i find the current valuation ludicrous, and it seems like it's pushed more by Softbank's Vision Fund than a firm grasp in reality.
- senttoschool 3y ago
  >Arm reported $524 million in net income on $2.68 billion in revenue in its fiscal 2023, which ended in March >i find the current valuation ludicrous, and it seems like it's pushed more by Softbank's Vision Fund than a firm grasp in reality. Just for comparison, AMD, which is still quite small, gets about $2b - $4b annual net profit. Intel, before their recent disaster quarters, had as much as $24b in annual net profit. $524m in net income is peanuts compared to the big boys. This is what I was saying in my original post. ARM is a more valuable company if they were acquired by Nvidia. As a standalone company, it's not that great. Again, a weird quirk of ARM is that their biggest customers are also their biggest competitors. This puts a cap on how much profit they can make. If ARM decides to raise licensing fees exponentially, which is likely not simple due to long-term contracts, then companies will seriously look to RISC-V. Because ARM is the smallest fish in the pond, it can't pay for the best engineers. The best chip engineers will go to AMD, Intel, Nvidia, Apple, Qualcomm, and startups. ARM is where these companies go to poach.

cgeier 3y ago

It feels strange to call it in "Initial Public Offering" when the company used to be public ten years ago.

jwestbury 3y ago
Should it be an APO? Additional Public Offering?
- larvaetron 3y ago
  SPO: Subsequent Public Offering
- offices 3y ago
  It's just an IPO. The history doesn't matter.
_xivi 3y ago
It's a sequel
phkahler 3y ago
IPO stands for "Infusion of Public Overspending". It's an exit strategy for private equity and VC, so more of an ending than anything "initial".

sschueller 3y ago

How long until Apple does a hostile takeover? /s I assume regulators would block a hostile takeover like they would a regular buyout if there are concerns regarding market power?

MikusR 3y ago
Apple with their special license couldn't care less about ARM.
- snvzz 3y ago
  >special license This idea that they have a special license keeps getting thrown about. But nobody has ever been able to provide any proof or otherwise reference a believable source. Until proven otherwise, it's a myth.
senttoschool 3y ago
Why would Apple ever want to own ARM? Their internal CPU design team is years ahead of the ARM team. Apple has an architectural license and doesn't care about ARM core designs. Quite honestly, ARM falling on its face hard is actually a benefit to Apple. That would mean that Apple Silicon and iPhone SoCs have less competition. Imagine if Qualcomm chips based on ARM designs are 5 years behind instead of the 2-3 years now. But the Nvidia + ARM combo made sense from a technical and strategic standpoint though.
- klelatti 3y ago
  > But the Nvidia + ARM combo made sense from a technical and strategic standpoint though. Made sense for Nvidia. Not for other Arm customers.
  - justin66 3y ago
    ...because seriously, how many of those customers could ever possibly want to use Nvidia's graphics or AI silicon? That stuff is never going to fly.

klelatti 3y ago

I think in many ways Arm is (or should be) a sort of large 'Mittelstand' [1] business. Long term focus, independence, customer focus etc are key to the success of this type of business. Trouble is, its success and its sector has given it a profile that attracts attention from the likes of Softbank who have other ideas. A company doesn't need to have a Nvidia like P/E ratio to be successful. [1] https://en.wikipedia.org/wiki/Mittelstand https://en.wikipedia.org/wiki/Mittelstand

phkahler 3y ago
You may be right. In that case they should offer a dividend to attract the kind of investors who are not necessarily looking for big gains in the stock price, but want a nice stable return. ARM was a growth stock for decades, but that phase is over for them.
sofixa 3y ago
> A company doesn't need to have a Nvidia like P/E ratio to be successful. Absolutely true. Sadly nowadays, especially in the US, and especially in tech, unless the company is growing like crazy or massive, it's considered as insignificant and dimissed.
- lotsofpulp 3y ago
  How are they “dismissed”? Are trading volumes or share prices for non crazy or massive companies too low?
- JumpCrisscross 3y ago
  > especially in the US, and especially in tech, unless the company is growing like crazy or massive, it's considered as insignificant and dimissed Maybe in Silicon Valley, were decades of totem disdain for anything resembling a business education is starting to take its toll. For anyone with a financial background, slow-growing profitable companies are most American industry. If you want to grow slowly (or barely at all), and want investors who like that, offer a dividend and price at a reasonable P/E.
- vikramkr 3y ago

kriro 3y ago

I'm pretty sure it's going to be one of these companies that I don't invest in for reasons that sound logical to me (a big part of the company just splitting in China basically rogue + my personal view that RISC-V will gain traction due to the licencing policies of ARM) that will do very well :D

amiga1200 3y ago

I’m glad that RISC-V SBCs are starting to become usable.

surajrmal 3y ago
Depends on what you mean by usable. If you don't need long term support, strong software ecosystem support, and performance parity, it's great. It'll be a few more years before everything comes together, but hopefully not too many.
- snvzz 3y ago
  >If you don't need Reads like FUD, as you go on to list a bunch of items that RISC-V actually already delivers. Point per point: >long term support Is achieved via upstreaming drivers[0] and providing documentation[1], something that e.g. StarFive is doing much better than Raspberry Pi ever has. >strong software ecosystem support RISC-V is rapidly building the strongest ecosystem. >performance parity JH7110 SoC used in boards like VisionFive 2 provides CPU performance between Raspberry Pi 3b and 4, at much lower power consumption. TH1520 SoC used in boards like Sipeed Lichee Pi4A[2] provides performance above Raspberry Pi 4. Both SoCs provide faster GPU (JH7110 is 4x that of Pi 4, TH1520 is faster), better hardware video codec blocks, cryptography acceleration, faster memory interface, faster I/O outside of the SoC and otherwise better and more built in peripherals. Note: Raspberry Pi have been used as reference points as they are, by far, the most popular ARM SBCs. >It'll be a few more years As proven above, it's already there against the Raspberry Pi line. But next year it'll be better, as RISC-V will finally compete with the fastest cores available. This is based solely on what's already announced (Ascalon, Veyron, P570 and so on). RISC-V enables the best processors. 0. https://rvspace.org/en/project/JH7110_Upstream_Plan https://rvspace.org/en/project/JH7110_Upstream_Plan 1. https://doc-en.rvspace.org/index.html https://doc-en.rvspace.org/index.html 2. https://news.ycombinator.com/item?id=37201754 https://news.ycombinator.com/item?id=37201754
- themiddleupper 3y ago
  The RISC V fanboism is rampant here with bunch of them repeating their marketing slogan in the comments. There is nothing inevitable about RISC V. If anything it has lot of mountains to climb before it can be considered a challenge to the existing instruction set. It may or it may not do that. Being open does not automagically make it happen.

S_A_P 3y ago

I’m curious and haven’t seen anything regarding the ip theft of ARM by (???). Didn’t the Chinese arm of the business get taken over in some way? It made the news a few years back and nothing ever came out of it.

nocoiner 3y ago
The Chinese subsidiary basically declared independence. Last I saw the two sides were at an impasse, and the Chinese sub was continuing to do its own thing - ARM parent appeared clearly to have the law and the facts on its side, but without the ability to enforce a foreign law judgment or get into an unbiased local court, what are you going to do? Forget it, Jake. It’s China.

manvillej 3y ago

and so we watch, 1 more tech company, approach its demise through the unending undereducated pressures of the market

BooneJS 3y ago

The world is so dependent upon ARM’s designs, yet their revenue is relatively small. Public companies are expected to grow year after year after year. It will be interesting to see how they do that without becoming a competitor to their customers. I wish them good luck!

unethical_ban 3y ago

I don't understand what ARM does. They have designed a processor architecture that is RISC-style. For some companies, ARM sells the design and others manufacture the chip. So what do Apple and Qualcomm get out of it, if they design their own architecture? Is apple tacking on proprietary extensions or instructions? Why didn't apple design a CPU architecture from the ground up ala RISC-V?

snvzz 3y ago
Your confusion seems to have to do with microarchitecture vs ISA. An ISA is the Instruction Set Architecture, the interface between software and hardware. A microarchitecture is a hardware implementation of an ISA. RISC-V is an ISA. ARM is a company that has both an ISA (actually several, but their current is ARMv9) and a bunch of microarchitectures. Their business model is to license their IP: - They may license you a microarchitecture, so that you can include it in your chip's design. - They may license you the ISA, so you can implement your own microarchitecture for the ISA. Note that you can't then license your microarchitecture to others, that's ARM's sole privilege. RISC-V's instruction space has some room for custom extensions. Thus it can be adapted to find specific needs, without asking for permission nor opting out of the strongest software ecosystem which RISC-V is rapidly building. But while RISC-V is pretty good technically, enabling the best processors, what's most disruptive is that it is an open ISA. It means there's now an open market with RISC-V microarchitectures to license, from a range of vendors. There's also some open source microarchitectures. Microarchitecture licensing aside, there's an ecosystem of companies offering related services, such as helping you verify your designs, trace your code and so on.

justin66 3y ago

From the recent FT article: “Despite our significant reliance on Arm China through our commercial relationship with them, both as a source of revenue and as a conduit to the important [Chinese] market, Arm China operates independently of us,” the prospectus warned, adding that Arm did not have any direct management rights or the right to representation on Arm China’s board.

peoplearepeople 3y ago

Prediction: 5 years from now Apple announces moving to an internally developed RISC-V core for Apple Silicon