Miscellaneous Photography/iStock Editorial via Getty Images
Arm, the Britain-based chip design unit of Japanese tech conglomerate SoftBank (OTCPK:SFTBY), is reportedly trying to raise the price of its chip designs in an effort to boost sales ahead of launch. next initial public offering.
The company, which designs processors for electronics and licenses its technology as intellectual property to various tech companies around the world, told “several” of its clients about a “step change in its business model,” according to the report. financial timeswhich cited several industry executives and former employees.
Arm, which was acquired by SoftBank (OTCPK:SFTBY) in 2016 for $32 billion, is looking at charging royalties based on the value of the device the chip is used for, as opposed to the value of the chip itself.
The company believes this change will allow it to earn “several times” more for each design sold, due in large part to rising smartphone prices.
In 2021, Arm’s revenue increased 35% year-over-year to $2.7 billion, with adjusted earnings of $1.0 billion.
Arm’s chip designs are used in devices around the world, including Apple (AAPL) products. Nvidia (NVDA), AMD (AMD), Qualcomm (QCOM) and many others also license IP from Arm.
The company scrapped plans to list in London in July 2022 due to the political situation in the UK government at the time. Seeking Alpha reported that the resignations of a UK investment minister and digital minister, who had played a prominent role in talks with SoftBank (OTCPK:SFTBY), led to the breakdown of talks.
However, in January, UK Prime Minister Rishi Sunak reportedly held talks with SoftBank (OTCPK:SFTBY) about an IPO based in London, with the talks being described as “very constructive” and “positive”.
Last month, Arm CEO Rene Haas said the semiconductor design company was “committed” to having an initial public offering this year.
