Intel (NASDAQ:INTC) has announced its investment in Arm Holdings, joining other tech giants such as Apple (NASDAQ:AAPL), NVIDIA (NASDAQ:NVDA), and Samsung (KS:005930). This move signifies a major strategic shift in the semiconductor industry. As SoftBank (TYO:9984) prepares for Arm's forthcoming Initial Public Offering (IPO), it has been seeking anchor investments from key industry players.
The decision to invest in Arm underscores its strategic importance to Intel Foundry Services and the Altera FPGA unit. Arm's technology, traditionally used in microcontrollers and smartphones, now powers a wide range of devices including desktops and servers. This broad usage has made collaboration with Arm crucial for Intel to maintain its competitive edge in foundry services.
Stuart Pann, senior vice president and general manager of Intel Foundry Services, elaborated on this during the Goldman Sachs (NYSE:GS) Communacopia & Technology Conference on Thursday. "The fact that our organization, the IFS organization, is embracing ARM at this level, investing in ARM, doing partnerships with ARM, should give you a signpost that we're absolutely serious about playing in this business because if you're not working with ARM, you can't be a foundries provider," Pann explained.
Despite Intel's commitment to its x86 architecture for its core products, collaborations such as these indicate an expanding horizon. The evolving partnership between Intel and Arm may extend into new sectors like client PC and server System-on-Chips (SoCs), marking an exciting phase for the semiconductor industry.
Arm Holdings has been amassing clients, partners, and investors over recent months. As an investor in Arm, Intel will gain better access to the company's future chip design Intellectual Property (IP). Pann also shared that Intel plans to focus on other low-power chipsets to penetrate this market segment further.
In preparation for Arm's IPO, SoftBank plans to offer $95.5 million of shares at $47 to $51 each. The company has already achieved a valuation of $55 billion, according to Bloomberg. With more opportunities emerging through SoftBank, New Street Research's Pierre Ferragu estimates that Arm will be worth $82 billion over the next three years.
The IPO for Arm Holdings Plc is anticipated to take place sometime next week.
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