Intel in talks to be anchor investor in Arm IPO

News | June 13, 2023

By Peter Clarke

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Chip giant Intel Corp. is in talks with Arm Ltd. about being an anchor investor in the processor IP licensor’s initial public offering (IPO) of shares, according to reports.

Arm is planning to sell some of its shares on Nasdaq later this year seeking to raise between US$8 billion and US$10 billion for parent SoftBank Group.

Arm has also been talking with other strategic investors about their intentions in an effort to make sure the IPO gets away, the reports said.

Estimates of how much the IPO could value Arm at vary between US$30 billion and US$70 billion.

Intel is a rival of Arm and its licensees in some markets. However, under CEO Pat Gelsinger Intel is working to decouple its manufacturing from its product development and is attempting to produce a foundry business model. This has involved the need to embrace Arm cores and intellectual property to appeal to the broader fabless chip market (see Intel moves ARM cores onto 1.8nm process for foundry).

Does anchor have clout?

Arm’s IP is used in various forms by Apple, AMD, Nvidia, Qualcomm, Samsung and many others. It has also made it a fundamental part of its business that it treats all customers the same and does not compete with them. It therefore could be destabilizing if Arm took an IPO from one or more of these companies and not others.

That said, Arm has fallen out in recent months with Qualcomm over licensing terms with a lawsuit pending (see Qualcomm hits back at ARM over lawsuit).

SoftBank and Arm have been subject to lobbying by successive UK prime ministers to list the IPO in London, but without success. SoftBank clearly feels it will get the best value for its sell-off in the tech-savvy US market. However, Arm remains headquartered in the UK and the possibility of a later dual-listing has not been ruled out.