ARM IPO filing launch could be the biggest of this year

SoftBank is preparing to file for an initial public offering (IPO) of ARM, which could be the biggest filing of this year. Arm makes money from upfront licensing fees for technology and then a royalty paid on each chip sold by Arm’s customers. The company said its annual revenue dropped 1% due to the slowdown in smartphone sales.

However, ARM’s launch in the stock market could add new strength in the IPO market. Reuters reported that SoftBank was planning to sell about 10% of Arm’s shares in the IPO and seek a valuation of between $60 billion and $70 billion for the chip designer.

With this filing, the company is also looking to expand its revenue sources through these royalties. Arm said more than 50% of its royalty revenue for the most recent fiscal year came from smartphones and consumer electronics. The global smartphone market is on track to hit a decade low this year, according to Counterpoint Research.