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#201: The first 8 days of ARM
Arm Holdings (icker: ARM) is a UK-based semiconductor ("chips") design company that just went public a lil’ over a week ago
Today we’ll take a look at:
Why is Arm’s IPO getting all the attention?
Are there any risks in the near term?
IPO highlights + What’s the deal with ARM?
A whopping $54 billion valuation, at $51 per share (biggest IPO valuation since 2021). 95 million shares were offered to the public market.
As of market close on 9/25 (Mon), shares are priced at ~$54
What's so special about ARM's technology? — it’s all about the chips
ARM creates semiconductor chips, including designs and the programming languages necessary, and then licenses out its IP to other companies
ARM supplied 99% of the world's smartphone chips, and clientele includes Apple, Microsoft, Nvidia, etc.
The company is expanding into smart cars, home appliances, and wearables but the AI hype is where the money seems to be at
In May, Arm unveiled the Cortex-4 CPU chip and the G720 GPU unit, which use 40% less and 22% less bandwidth, respectively, compared to their predecessors
There are risks, and even ARM admits
Coming straight from ARM’s own IPO Prospectus from August:
Like all companies these days, China is recognized as a “risk” given economic and geopolitical reasons
But more importantly, there is RISC-V (pronounced "risk five"), a rival chip design backed by "some of ARM's own customers"
Simply put, RISC-V is a growing alternative to Arm's technology and is "open-source" or free-to-use (so, of course, customers would support this!)
RISC-V is nowhere close to how much progress ARM's made, but a coalition of tech giants could possibly conjoin for the longer term benefit
(currently, members of RISC-V include Google, Huawei, Intel, Qualcomm, Seagate, Tencent, etc.)
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