Samsung joins as anchor investor ahead of Arm's $55 billion listing

Samsung Electronics will reportedly participate as an anchor investor for the upcoming IPO of British chip giant Arm after taking a conservative approach to the matter due to a perceived overvaluation and regulatory risk.

A smartphone with a displayed Arm Ltd logo is placed on a computer motherboard in this illustration taken March 6, 2023. [REUTERS]

Samsung Electronics will reportedly participate as an anchor investor for the upcoming IPO of British chip giant Arm after taking a conservative approach to the matter due to a perceived overvaluation and regulatory risk.

Samsung Electronics opted to make an investment in the chip designer, joining a slew of other industry players including Apple, Nvidia and Intel, according to a Reuters report on Sept. 2.

Amazon, which was earlier rumored to be participating in the IPO, decided to step out, the report said.

It added that the strategic investors have agreed to invest between $25 million and $100 million each. The specific amount for each company hasn’t been disclosed yet.

This means the offering price will come in between $47 and $51 per share.

It makes Arm’s valuation between $50 billion and $55 billion, down from the initial estimation of $64 billion.

Arm’s IPO on Nasdaq, which is expected in September, is considered to be the biggest IPO deal of the year.

The British chip designer controls a majority of the world’s application processor market, designing and licensing basic blueprints for chips.

Chip giants like Samsung, Nvidia and Qualcomm are all clients of Arm.

The chip companies’ participation in the SoftBank-owned Arm’s IPO is seen as a move to strengthen ties with the chip designer as it holds a dominant position in the chip industry, according to Reuters.

It said the IPO investment doesn’t “come with a seat on Arm’s board or ability to dictate strategy,” but it will “strengthen ties with each participating company and make it harder for a competitor to acquire Arm later," it said.

Nvidia’s attempt to buy Arm from SoftBank was blocked by antitrust regulators including the U.S. Federal Trade Commission due to concerns over market monopoly.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]