Semiconductor Monthly | August 23

 In August's edition of Semiconductor Monthly, we look at ARM's recently unveiled plans to IPO on Nasdaq, how the UK's government-formed semiconductor panel will help to shape the UK's semiconductor strategy, and how Germany is looking to lead the way for Europe's semiconductor ecosystem.

Arm officially files for Nasdaq listing in the biggest anticipated IPO of 2023

Just five months after Arm announced they had confidentially filed for a Nasdaq listing; an official application has been made. Whilst a projected share price hasn't yet been provided, analysts speculate this could be the biggest IPO of 2023. This will, however, come down to whether ARM has been receiving fair valuations, something that SoftBank, Arm's majority stakeholder, has been stung with in the past.

SoftBank recently bought the 24.99% stake in Arm that it didn't own outright from its Vision Fund unit valued at an excess of more than $64 billion, twice what SoftBank paid for Arm only seven years ago. Some analysts think this is an overvaluation of Arm, predicting their worth to be closer to $40 billion based on a preliminary analysis of the limited financial information available.

In the past, SoftBank has paid a steep price for making up its deals, most notably with its investment into WeWork. In 2017, SoftBank invested $4.4 billion into the co-working company, and in early 2019 invested another $6 billion, with WeWork valued at $47 billion at the time. They went on to invest even more into the company and lost nearly its entire investment. 

Whether ARM's IPO will be the biggest of 2023 is still yet to be determined, and at this point, it's anyone's guess. What we do know, however, is that in 2020, ARM agreed to sell itself for $40 billion in cash and stock to Nvidia before the deal fell through. If this valuation is anything to go by then, things are looking up for SoftBank, Arm and the UK's semiconductor industry.

The UK Announced a Government-Formed Semiconductor Panel

ARM's IPO isn't the only news putting them in the spotlight this month. On the 3rd of August, the UK government published a press release announcing the formation of an expert semiconductor panel made up of key figures from the industry, including Richard Grisenthwaite, Chief Architect at Arm and Americo Lemons, CEO of IQE.

This comes just a few months after the UK announced its long-awaited plans to bolster its national semiconductor industry. Whilst the announcement fell flat for many, regarding it as too little, too late, the formation of this panel will ensure the investments made are as effective as possible for the industry.

The 10-strong panel, consisting of representatives from business and technology, experts in venture capital, skills, and research, has been hand-picked to ensure the investments made are as effective as possible and will help shape the UK's semiconductor industry for the next 20 years. Ensuring close collaboration between the government and those at the forefront of the industry could be the best way to maximise the impact the investments will have.

This announcement was followed by the government announcing details of the UK's first semiconductor design incubator, run by Silicon Catalyst, UK, which is an experienced start-up accelerator that aims to support semiconductor start-ups across the UK through an extensive nine-month incubator programme.

Whilst the government's investments indeed paled compared to what the USA and the EU have pledged to invest, it's clear to see that the UK is trying to support their national semiconductor industry from all angles.

Germany on track to lead the way for European semiconductors

Widely considered to be the industrial capital of Europe, Germany is now setting its sights on becoming the capital of silicon for the union. Following Europe's recently announced Chips Act, which aims to double Europe's semiconductor manufacturing capacity by 2030, Germany aims to leverage as much of the €43 billion within its borders.

Germany is already a significant player in the European semiconductor industry. In Europe, 1 in every three semiconductors is manufactured and produced within Saxony, home of Dresden (where our office is based) and soon to be home of TSMC's latest €10b fabrication. Germany is extremely well positioned to lead the way for Europe's ambitious plans, being home to an incredible pool of talent and supporting industries.

Big players in the industry seem to feel the same, as Intel, TSMC, Bosch, Infineon, NXP, GlobalFoundries, Wolfspeed, and Littlefuse have all announced their entrance or expansion in Germany since the European Chips Act proposal in April this year. 

Across the group, four new fabs and a SiC Research centre have been announced, as well as Littlefuse's purchase of a fab from Elmos Semiconductor SE.

Expanding investment is overall positive and great news for Germany and Europe as a whole; however, the current skills gap will be exacerbated by this. The German Economic Institute recently published a study stating that there's currently a shortage of 62,000 skilled workers across various professions in the semiconductor industry in Germany as of today.

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