[Tech Talk] ARM Ahead of IPO... Why Amazon Is Also Showing Interest

ARM Ecosystem Expands Broadly and Deeply Over Recent Years
Extends Beyond Mobile Phone APs to Servers
Retail Giant Amazon AWS Also a Key Customer
10 Big Tech Candidates as 'Anchor Investors'

British semiconductor design company ARM Limited (ltd) is scheduled to be listed on the New York Stock Exchange in the United States later this year. In this process, its parent company SoftBank is recruiting several major US tech companies as 'anchor investors.' Among the candidates are Apple and Samsung Electronics, who have long collaborated with ARM, as well as competitors like Nvidia and Intel, and even retail giant Amazon.

SoftBank Stakes Its Fate on ARM IPO Success

SoftBank Group, led by Chairman Masayoshi Son, is making every effort to ensure the successful New York listing of its subsidiary ARM.
[Image source=Reuters Yonhap News]

Anchor investors, or cornerstone investors, play a crucial role in a private company's initial public offering by making substantial equity investments to drive the success and momentum of the listing. SoftBank, which has been hit hard by the contraction of the venture capital (VC) market, is putting its all into the ARM IPO.

Therefore, it seems natural that SoftBank is trying to recruit as many large corporations as possible as anchor investors. SoftBank aims to achieve a market capitalization of $70 billion and raise over $10 billion in investment through this listing.

According to reports from financial media such as the UK’s Financial Times (FT), the list of anchor investor companies negotiating with SoftBank numbers nearly ten. Among them are companies like Samsung and Apple, which already have cooperative relationships with ARM, but also internet companies like Amazon and Google. These companies do not seem to have a very close connection with ARM, a semiconductor company.

Over 10 Potential Investors... Showcasing the Scale of the ARM Ecosystem

NVIDIA's next-generation AI computing features the 'Grace' super CPU (left), which plays a key role with the Neoverse V2 core designed by ARM.

According to the media, ARM’s anchor investors will not have significant influence over ARM’s management decisions, such as recommending board members or securing additional voting rights. Nevertheless, the interest from multiple companies indicates how vast the ARM industrial ecosystem has become.

In the past, ARM excelled particularly in low-power semiconductor design. Because of this, it held a dominant influence in microcontrollers with simple architectures and in mobile phone application processors (APs), where power efficiency and heat management take precedence over performance. This is why Apple, Samsung, and MediaTek collaborate with ARM.

However, the ARM ecosystem recently extends far beyond just the smartphone market. For example, the core of Nvidia’s next-generation artificial intelligence (AI) supercomputer GC200, scheduled for release next year, is not actually the GPU. It relies on the performance of the 'Grace Superchip,' which is equipped with 144 cores of ARM’s latest server CPU 'Neoverse V2.'

ARM, the King of Mobile Chips, Eyes the Server Market... Amazon as the Top Contributor

High-performance ARM server CPUs will be installed in Amazon data centers.
[Image source=Amazon AWS]

Amazon, along with Microsoft, is one of the two giants in the global cloud industry and uses ARM CPUs for its own data center chips. The processor, called 'Graviton,' is the primary contributor to expanding the ARM server market.

Until just a few years ago, the server chip market was dominated by Intel and AMD. Unlike mobile phones, servers prioritize performance over low power consumption, and Intel and AMD are companies experienced in producing ultra-high-performance 'superchips.' However, with companies like Amazon adopting ARM technology, significant shifts are occurring in this market.

According to market research firm IDC, ARM server chips now hold a 10% market share, doubling from 5% two years ago. In China, where it is difficult to procure advanced American computer chips, ARM server chips account for nearly 40%. Moreover, Amazon holds more than half of these ARM server chips.

Even Competitor Intel Collaborates with ARM in Foundry Services

US semiconductor company Intel
Photo by Yonhap News

In the server market, even ARM’s biggest competitor, Intel, is deepening its cooperation with ARM. Earlier in April, Intel and ARM announced a strategic collaboration.

The core of the agreement is that Intel’s contract manufacturing division, 'Intel Foundry Services' (IFS), will provide ARM’s design technology to enable the construction of low-power system-on-chips (SoCs) using the 18A (1.8 nm) process.

Through this contract, IFS plans to expand its scope from smartphone SoCs to automotive semiconductors, Internet of Things (IoT), satellite semiconductors, and even data centers in the future.