I think in many ways Arm is (or should be) a sort of large 'Mittelstand' [1] business. Long term focus, independence, customer focus etc are key to the success of this type of business.<p>Trouble is, its success and its sector has given it a profile that attracts attention from the likes of Softbank who have other ideas. A company doesn't need to have a Nvidia like P/E ratio to be successful.<p>[1] <a href="https://en.wikipedia.org/wiki/Mittelstand" rel="nofollow noreferrer">https://en.wikipedia.org/wiki/Mittelstand</a>
Bit of a downer for the UK to see them list in the US, I do understand they just want access to the most capital, but I find a shame LSE is not competitive for this kind of thing.
During the height of the covid tech bubble, Nvidia offered to buy ARM for $40b. Right now, Softbank wants a $60b - $70b valuation when many tech stocks have lost 90%+ and some large caps have lost 30% - 50%.<p>What justifies such crazy increase in value? Also, I believe Nvidia overpaid for the company regardless. Nvidia was willing to pay $40b because they want a world-class CPU design team to integrate their GeForce IP into SoCs and service chips.<p>But a standalone ARM is not very valuable. The reason is that ARM's business model (licensing core designs and ISA) makes peanuts compared to Qualcomm, Apple, Intel, AMD, etc. In addition, ARM's biggest customers are also their biggest competitors. For example, Apple competes with stock ARM designs with Apple Silicon. Qualcomm will be competing with ARM designs via Nuvia chips. Ampere Computing just designed a custom ARM core of their own.<p>When ARM only license the ISA (Apple Silicon, Nuvia, and Ampere One), they make peanuts. When they license ARM core designs, they make slightly more than peanuts.<p>It's generally not a good business to invest in. I find it hard to justify the $60b - $70b valuation. No doubt Softbank will try to sell ARM as an AI company. It's not.
Interesting. As much as ARM-based processors are doing so well in the market, it's important to understand that ARM has specific licensing agreements with Apple, Samsung, etc. It is not so obvious that it will continue being a cash cow for many more years.
I'm pretty sure it's going to be one of these companies that I don't invest in for reasons that sound logical to me (a big part of the company just splitting in China basically rogue + my personal view that RISC-V will gain traction due to the licencing policies of ARM) that will do very well :D
I’m curious and haven’t seen anything regarding the ip theft of ARM by (???). Didn’t the Chinese arm of the business get taken over in some way? It made the news a few years back and nothing ever came out of it.
The world is so dependent upon ARM’s designs, yet their revenue is relatively small. Public companies are expected to grow year after year after year. It will be interesting to see how they do that without becoming a competitor to their customers. I wish them good luck!
From the recent FT article:<p><i>“Despite our significant reliance on Arm China through our commercial relationship with them, both as a source of revenue and as a conduit to the important [Chinese] market, Arm China operates independently of us,” the prospectus warned, adding that Arm did not have any direct management rights or the right to representation on Arm China’s board.</i>
I don't understand what ARM does.<p>They have designed a processor architecture that is RISC-style. For some companies, ARM sells the design and others manufacture the chip. So what do Apple and Qualcomm get out of it, if they design their own architecture? Is apple tacking on proprietary extensions or instructions?<p>Why didn't apple design a CPU architecture from the ground up ala RISC-V?
How long until Apple does a hostile takeover? /s<p>I assume regulators would block a hostile takeover like they would a regular buyout if there are concerns regarding market power?