ARM Heading to Nasdaq, Oversubscription Signals Positive Market Response

Demand from institutional investors is pouring in for ARM, a UK semiconductor design company planning to list on the US Nasdaq, fueling excitement around the IPO.

On the 11th (local time), Bloomberg News reported, citing sources, that the subscription for institutional investors on that day saw an oversubscription exceeding 10 times the public offering volume. Due to the strong subscription demand, the closing deadline is expected to be moved up by one day from the original schedule. Sources forecast that the order volume could increase up to 15 times by the subscription deadline.

With stronger-than-expected demand, expectations are rising that the final public offering price will reach the top or even exceed the estimated range. ARM previously stated in the securities registration statement submitted to the US Securities and Exchange Commission (SEC) last month that the offering price per share was set between $47 and $51.

In this case, ARM's expected market capitalization is projected to exceed $54.5 billion (approximately 72.3 trillion KRW). This is higher than the valuation of $45 billion to $50 billion assessed by the market when ARM was being considered for sale to semiconductor company Nvidia. When SoftBank’s Vision Fund acquired a 25% stake in ARM last month, the estimated enterprise value was $64 billion.

ARM plans to announce the public offering price on the 13th and complete its listing on the Nasdaq market within this month.

To ensure IPO success, ARM has sought anchor investor participation from major customers. These include Samsung Electronics, Apple, Nvidia, Alphabet, AMD, Intel, Cadence Design, and Synopsys. Since these companies consider ARM’s semiconductor designs essential resources, it is analyzed that they participated as investors to expand business relations with ARM and prevent competitors from gaining an advantage.

Foreign media such as Bloomberg report that ARM holds a dominant position in the semiconductor design market and plays a key role within the semiconductor value chain, attracting strong market interest. It is noted that ARM’s IPO could revitalize the Nasdaq IPO market, which has been sluggish since the SPAC boom subsided.

Headquartered in Cambridge, UK, ARM possesses core technologies in semiconductor design that serve as the "brain" of IT devices such as PC central processing units (CPUs) and smartphone application processors (APs). After acquiring ARM in 2016, SoftBank attempted to sell ARM to Nvidia for up to $40 billion in 2020, but the deal was blocked by regulatory authorities worldwide. Consequently, SoftBank shifted its strategy to listing ARM on the US stock market to recover funds instead of selling.