Arm CEO Rene Haas in front of the New York Stock Exchange
Photo: JUSTIN LANE / EPA
The chip designer Arm, whose technology is found in virtually all smartphones, has started with a price jump on the New York Stock Exchange. At the halfway point of trading on Thursday, the stock was trading at around $61, about one-fifth above the issue price. The IPO is the largest in the U.S. this year and was also considered a test for other companies.
Arm had set the issue price at $51. It was at the upper end of the price range of $47 to $51.
Softbank will retain a stake of around 90 percent in Arm after the IPO and will receive the proceeds of around five billion dollars from the share sale. Based on the chip architectures designed by Arm, Apple, among others, develops the processors for its devices. The semiconductor company Qualcomm, whose chips run many Android phones, also uses it. The companies pay levies to Arm for the use of the chip architecture.
The Arm designs prevailed over chip systems from Intel in smartphones and tablet computers – partly because they require less power. Meanwhile, chips based on Arm architectures are also used in data centers, and Apple uses them in its Mac computers.
Softbank had bought the British company Arm in 2016 for 32 billion dollars and taken it off the stock exchange. A sale to the chip company Nvidia failed last year due to concerns from competition watchdogs. After that, the IPO was decided, the proceeds of which will benefit Softbank.