A host of risks stemming from China are casting a cloud over the chip designer's listing plans.
Mohamed Awad, Arm’s Senior Vice President and General Manager for the Infrastructure Line of Business, speaking at a keynote on the “next big leap in computing”, held during COMPUTEX, in Taipei, Taiwan. May 31, 2023. Credit: Arm
Wall Street bankers may be salivating at the upcoming flotation of Arm Holdings, the British company whose chip designs help power most of the world’s smartphones. Yet even though Arm has become the world’s dominant provider of a nearly indispensable product, it has a clear Achilles’ heel: its relationship with China.
With so-called ‘cornerstone’ investors including Apple, Google and Nvidia already signed up, Arm this week said it is aiming for a market capitalization of up to $52 billion with its initial public offering in the United States this fall.
Whether it can achieve such a valuation will depend in large part on the broader investment community’s view on Arm’s exposure to China, laid bare when its IPO prospectus disclosed a litany of risks relating to the company’s presence in the world’s second-largest economy.
Arm earned a quarter of its revenue in China in the year to March 2023. Yet as its IPO prospectus makes clear, it does not contro
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