Listing duo offers followers a cautious playbook 21 Sep 2023 Chip designer Arm and grocery delivery company Instacart have secured relatively successful stock launches, offering hope of a wider reopening of the IPO market. In this Viewsroom podcast, Breakingviews columnists explain how cornerstone investors and lowly valuations helped.
China’s next chip battle is for the bottom line 19 Sep 2023 Huawei’s new smartphone proves the country can make cutting-edge hardware despite US restrictions. But it’s unclear if semiconductor provider SMIC can scale supply. Huawei’s flashy phones have hogged the limelight: SMIC’s shrinking margins deserve the same scrutiny.
Arm’s $52 bln IPO value sets stage for a fall 13 Sep 2023 CEO Rene Haas convinced investors to pay the top of the range for the chip designer’s float. To justify the valuation, he’ll have to turbocharge growth while keeping a lid on costs. Anything but laser-perfect results for the next two years will cause a rapid share price tumble.
Arm’s IPO valuation rests on big dose of hope 7 Sep 2023 The SoftBank-owned chip designer is getting ready to list. In this Viewsroom podcast, Breakingviews columnists argue that even the company’s reduced price tag of $50 bln is still far too high, and debate what investors would have to believe to buy the shares.
SoftBank’s reduced Arm price tag is still too high 5 Sep 2023 The Japanese group may float its UK chip designer for $50-54 bln. That’s lower than initially hoped, but still implies an implausible future where revenue and profitability soar. If Arm merely grows at recent rates and nudges up margins, its market worth is more like $35 bln.
Nvidia gives Arm IPO a double leg-up 4 Sep 2023 The $1.2 trln semiconductor designer’s AI-inflated stock price provides a following wind for the UK group’s float. Now Nvidia and two peers may endorse its valuation by buying into Arm’s offering. Owner SoftBank will be hoping other investors buy into the somewhat circular logic.
SoftBank could live with a cut-price Arm IPO 30 Aug 2023 The Japanese conglomerate wants a $60-70 bln price tag for the UK chip designer, according to reports. But it has reasons to push on even at a lower value, in part because a float would boost the parent group’s creditworthiness. That gives investors an incentive to play hardball.
Arm’s changing business model is wildcard for IPO 24 Aug 2023 As well as jumping on the AI bandwagon, SoftBank’s soon-to-float chip designer has altered the way it charges big customers to boost growth and smooth out revenue. If it works, a valuation north of $60 bln looks slightly less implausible. But investors lack evidence so far.
AI frenzy’s feedback loop stuffs Nvidia 23 Aug 2023 The $1.2 trln semiconductor designer’s second-quarter revenue doubled. Tech giants’ valuations are soaring on AI hype, so naturally companies are pouring money into it, including by buying Nvidia's chips. As long as investors quack for more, Jensen Huang's firm gets fed.
Arm’s IPO risks shine brighter than its potential 22 Aug 2023 SoftBank’s chip group is leaning on the artificial-intelligence boom to justify a hoped-for float valuation north of $60 bln. There’s no evidence to support that in the numbers, which show lumpy, shrinking sales. China risks and lack of investor control also call for a discount.
Samsung’s ASML sale highlights vexing cash bind 18 Aug 2023 South Korea’s $330 bln chipmaker more than halved its stake in the Dutch group to raise an estimated $2 bln for its expansion plans. Yet the company already has $66 bln in the bank. Trouble is, much of that is probably trapped abroad, necessitating some creative funding choices.
Arm float may deepen cracks in IPO market 17 Aug 2023 The chip designer is preparing a stock market listing in the US. Orders are already being lined up from customers like Amazon.com but in this Viewroom podcast Breakingviews columnists explain why it may not get a lofty valuation and how that could put off possible followers.
China does Intel a small favor 16 Aug 2023 The chipmaker aborted its $5 bln acquisition of Tower Semiconductor after failing to secure approval from Beijing. The questionable deal was made worse by the target’s struggles. And given the cross-border tech tension, a $350 mln break fee at this stage is a small price to pay.
Arm IPO depends on more than Big Tech support 14 Aug 2023 The UK chip designer may sell shares to Apple or Amazon as part of its $10 bln stock offering. Backing from large clients could help prop up its valuation. But antitrust concerns mean the stakes will be small. To succeed, owner SoftBank needs to win over big institutional funds.
America’s new China curbs eschew scale for smarts 10 Aug 2023 The Biden administration’s plan for screening US investments in the People’s Republic is not the wide-ranging proscription many expected. It targets only a handful of deals, would ban even fewer and isn’t retroactive. That’s a relief for most investors – and for diplomacy, too.
Superconductivity is wild card for stock market 2 Aug 2023 The possible discovery of material that efficiently carries electricity is a fresh disruption for investors grappling with artificial intelligence. They must decide if it’s real, if it’s viable; how it affects existing markets; if it creates new ones; and when change will happen.
Capital Calls: European steel 21 Jul 2023 Concise views on global finance: Sweden’s $6 bln group SSAB misses profit forecasts as Europe’s demand tanks and steel prices shrink.
Samsung sees glimmer of light at end of tunnel 7 Jul 2023 The $365 bln South Korean tech titan warned that its quarterly operating profit has probably cratered 96%, thanks to a global memory-chip glut. But there are signs that prices are bottoming out. A recent artificial intelligence frenzy may also bolster demand in the year ahead.
India can aim lower in its chip dreams 5 Jul 2023 Despite offering $10 bln in subsidies, the country has only managed to attract Micron to build a less-advanced factory. Even so, the chance to grab share from China in the commoditised but vital low-tech chips market could pay off amid booming demand and geopolitical tensions.
China’s rare metals swipe has more bark than bite 4 Jul 2023 Beijing is imposing export controls over gallium and germanium, used in chips, fibre optics and military equipment. This confirms Western fears that the country might leverage its strategic metals dominance to push back on sanctions. Yet market realities blunt China’s edge.