Taiwan Semiconductor Manufacturing Co. (TPE:2330) (NYSE:TSM), the world's largest contract chipmaker, has approved an investment of up to $100 million in Arm Holdings Plc's initial public offering (IPO), as per the company's announcement on Tuesday. TSMC, a major supplier for Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NASDAQ:NVDA) among others, manufactures semiconductors that are often based on Arm architecture.
Arm Holdings, a British semiconductor designer owned by Japanese conglomerate SoftBank (TYO:TYO:9984), is expected to go public later this week in the U.S. The company has priced its shares between $47 and $51, aiming to raise nearly $5 billion and valuing the company at over $50 billion. The IPO has attracted significant interest from major technology companies including Nvidia, Apple, and TSMC, which collectively expressed interest in purchasing up to $735 million worth of shares.
On Monday, Bloomberg reported that the Arm IPO was already oversubscribed by 10 times, suggesting that the order books for shares could close as early as Tuesday, ahead of expectations. The report also indicated that Arm might consider raising the price range for its IPO due to the high demand.
TSMC's approval of the investment signifies its support for Arm's success. As TSMC Chairman Mark Liu said last week, "Arm is an important element of our ecosystem, our technology and our customers’ ecosystem. We want it to be successful, we want it to be healthy."
Arm designs the blueprint or chip architecture upon which 99% of the world's smartphone processors are based on. Major clients like Apple, Nvidia, Alphabet (NASDAQ:NASDAQ:GOOGL), Advanced Micro Devices (NASDAQ:AMD), Intel (NASDAQ:NASDAQ:INTC), and Samsung Electronics (KRX:KS:005930) have signed up as cornerstone investors in Arm's IPO.
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