Apple Signs New Deal With SoftBank-Owned Arm for Chip Technology, IPO Documents Say

Apple uses Arm's technology in the process of designing its own custom chips for its iPhone, iPad, and Mac models.

By Reuters | Updated: 6 September 2023 12:16 IST

Apple Signs New Deal With SoftBank-Owned Arm for Chip Technology, IPO Documents Say

Photo Credit: Reuters

Arm owns the intellectual property behind the computing architecture for smartphones

Highlights

Apple uses Arm's technology to design its own custom chips
Arm become dominant in mobile phone chips
Its low power consumption helps batteries last longer

Apple has signed a new deal with Arm for chip technology that "extends beyond 2040," according to Arm's initial public offering documents filed on Tuesday. Arm unveiled pricing on Tuesday for what it hopes will be a $52 billion (roughly Rs. 4,31,951 crore) initial public offering, which would be the largest such deal in the US this year. Arm owner SoftBank Group plans to offer 95.5 million American depository shares of the United Kingdom-based company for $47 (roughly Rs. 3,900) to $51 (roughly Rs. 4,235) apiece, Arm said in a filing.

Arm owns the intellectual property behind the computing architecture for most of the world's smartphones, which it licenses to Apple and many others. Apple uses Arm's technology in the process of designing its own custom chips for its iPhones, iPads, and Macs.

The two companies have a long history - Apple was one of the initial companies that partnered to found the firm in 1990, before the release of its "Newton" handheld computer in 1993, which used an Arm-based processor chip. The Newton flopped, but Arm went on to become dominant in mobile phone chips because of its low power consumption, which helps batteries last longer.

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Apple was among a number of large technology companies that on Tuesday invested $735 million (roughly Rs. 6,105 crore) in Arm's initial public offering. Reuters last week was the first to confirm that Apple was among the strategic investors who agreed to buy shares.

The deal disclosed on Tuesday was not mentioned in Arm's previous IPO filing documents made public on August 21, implying that the deal was signed between then and September 5.

Arm declined to comment beyond its filings, and Apple did not immediately return a request for comment.

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