Arm reports record sales as SoftBank suffers historic loss

Semiconductor designer Arm has reported record revenues – up by 35% to $2.7bn (£2.2bn) – in the wake of parent company SoftBank reporting a record $27bn loss through its tech funds.

Japanese conglomerate SoftBank is looking to float Arm on the public markets after its sale to US tech giant Nvidia collapsed due to pressure from competition regulators.

Arm, which designs and licences processor intellectual property used in many of the world’s smartphones and computers, shipped a record 29.2 billion chips in 2021.

That boosted its non-royalty licencing revenues up by 61% to $1.13bn (£927m). Its royalty revenues increased by 20% to a record $1.54bn (£1.26bn), while adjusted earnings were up 68% year on year to $1bn.

“Our record results demonstrate that the demand for Arm technology and the strength of the Arm ecosystem has never been greater – our compute platform will power the next set of technology revolutions across cloud computing, automotive and autonomous systems, the IoT, the metaverse and beyond,” said Rene Haas, CEO, Arm.

Contrastingly, SoftBank this week published a $27bn (£22.17bn) record loss for its Vision Fund. The world’s largest technology investor had previously gone 14 years without posting a quarterly loss, before it notched up an $8.9bn loss in 2019 due to bad bets on companies such as WeWork and Uber.

Softbank acquired Cambridge-headquartered Arm company back in 2016 for $32bn (£23.4bn) – a move that critics bemoaned as selling the “jewel” of British tech.

Softbank’s CEO has said that Arm will have a “golden era and an exciting IPO soon”.

Uncertainty over SoftBank’s Arm listing

However, the timing of the IPO could be delayed due to the market uncertainty created by large selloffs of technology stocks.

The location of the Arm IPO has sparked debate in the tech industry. Many UK tech stakeholders believe that Arm should list in London, with Prime Minister Boris Johnson joining the lobbying efforts last week to persuade SoftBank to choose the capital over New York.

However, the co-founder of the company that Arm span out of recently called London “too small” for an Arm IPO and proposed a dual listing with New York being the “natural solution”.

This comes after US GPU designer Nvidia earlier in the year abandoned its $40bn (£29.6bn) takeover of Arm.

Arm choosing the US for its IPO would come as a massive setback for the UK government as it is aiming to attract more tech businesses to list in the capital following Brexit IPO reforms.

UK tech IPOs raised a record £6.6bn last year, double the amount in 2020, with notable listing including Deliveroo and Moonpig amongst them.

UKTN contacted Arm for comment but was pointed to Softbank for comment.

Softbank has been approached for comment.