LONDON – British chip designer Arm Ltd. said it intends to list its shares in New York, a blow to London’s stock exchange and a move that comes amid a race between the United States, Europe and China to build out their semiconductor ecosystems.
Mr. Son has long signaled that a public offering was a backup plan, and recently talked up Arm in an initial public offering in roadshow-like fashion. However, the company had not announced a location.
SoftBank had been leaning toward listing Arm in New York, home to other major tech giants. The British government and finance officials had tried to persuade SoftBank to list Arm at home as well, according to people familiar with the matter. Eschewing London represents a blow to finance capital, with other major UK companies having recently sought US listings.
Arm’s choice of New York over London is “a significant blow to the UK tech sector,” said Russ Shaw, founder of Tech London Advocates, an industry group. “It is disappointing news for London Stock Exchange LSEG 1.94%
and the legacy and future of the British semiconductor industry.”
Arm designs and licenses technology found in chips that power mobile devices and has emerged as a hub in the global chip ecosystem. Newer Arm designs are increasingly finding their way into PCs, pushing into a market long dominated by Intel Inc.
A U.S. IPO is “the best way forward for the company and its stakeholders,” Arm Chief Rene Haas said. He said the company had been engaging with the UK government and the stock market regulator over the decision for months.
Mr Haas said Arm plans to keep its headquarters in England, where it will increase investment through a new site in Bristol and higher headcount. Arm will also continue to house its substantive intellectual property in the UK
Mr Haas said Arm would also consider a subsequent secondary listing in the UK “We will continue to invest and play a significant role in the UK technology ecosystem,” he said.
Arm is one of the world’s most important behind-the-scenes semiconductor companies. Arm-based chips power more than 95% of smartphones, including all Apple ones Inc.’s
Both device makers and chip makers have relied heavily on Arm designs, making the company the Switzerland of the chip industry – offering its designs to all without favoring any one company.
That trust was at the heart of some of the antitrust investigations that Nvidia faced when it offered to buy Arm in 2020. Both companies vowed that Arm’s no-favors approach would not change if the deal went through.
However, the Federal Trade Commission sued to block the transaction, claiming it would give Nvidia illegal control over computer technology and design that rivals needed to develop their own competing chips. The UK’s antitrust regulator also launched an in-depth investigation into the proposed transaction, citing both competition and national security concerns. The regulator had previously said that Nvidia’s acquisition of Arm would lead to a realistic prospect of less competition, less innovation and more expensive products. China had also begun a review of the agreement.
After the sale was called off and SoftBank signaled plans for an IPO instead, British officials pushed Mr. Son to consider London for the IPO. The London Stock Exchange tilts towards legacy companies in areas such as banking, energy and mining. Along with the British government, the exchange operator had lobbied SoftBank to dual-list Arm in London as part of efforts to attract more growth companies, according to people familiar with the discussions.
By attracting Arm, the LSE would have regained a company that was a mainstay before SoftBank bought it in 2016. The exchange would bet that the IPO would encourage other domestic and foreign technology companies to list on the LSE rather than focusing only on US listings .
The planned IPO in New York comes amid a global surge in interest from governments – and investors – in chip-related businesses, amid geopolitical tussles over key supply lines. The US government has imposed export restrictions on advanced chips and chip-making equipment to China, making it more difficult for Chinese companies in the sector to hire Americans. This has put increased pressure on Beijing’s efforts to boost its domestic chip industry. Chinese investors, meanwhile, have poured money into a chip-related IPO frenzy there.
Earlier this week, the US began the application process for subsidies for semiconductor production under the $53 billion Chips Act. The industry was forged in the USA, but in recent years has moved much of the production abroad.
The European Union’s executive arm has also introduced plans to make available public and private funding for the chip manufacturing industry.
—Stu Woo contributed to this article.
Write to Ben Dummett at firstname.lastname@example.org
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