Changing market conditions have prompted chipmaker Arm to lower its expectations in terms of market valuation and the amount it will raise upon launching its initial public offering (IPO). In addition to reporting a decline in revenue, Arm has also engaged in a higher-than-expected level of business in China, thereby adding to its risk.
Operating most of its Chinese business through Arm China, this is the SoftBank-owned chipmaker’s single largest customer, accounting for a quarter of sales for the year ended March. Arm’s total revenue declined by 1% last year to $2.68 billion.
Now, the chip designer is lowering its expected valuation from a range of $60 billion to $70 billion to a range of $50 billion to $60 billion. The company expects to raise between $5 billion to $7 billion through its IPO, down from its previous projection of $10 billion.