UK govt considers invoking national security in Arm IPO saga

Reportedly dropping hints it may use legislation to push a London listing


The UK government is upping the ante in attempts to have Arm listed on the London stock exchange, with reports suggesting it is considering the threat of national security laws to force the issue with owner SoftBank.

According to the Financial Times, the British administration is considering whether to apply the National Security and Investment Act (NSIA), which came into force at the start of the year, in a bid to have SoftBank change its mind over listing Arm exclusively on the Nasdaq in New York, as it has previously indicated.

The FT cites the usual "people familiar with the matter", who indicated there had not yet been a formal debate over using national security legislation, and the idea was opposed by some government officials.

Nevertheless, the news that using the NSIA has even been discussed shows the government is determined to have Arm listed in London, perhaps because the chip designer is still seen as a global technology success for Britain, despite the government allowing it to be sold to Japan's SoftBank in 2016.

Potential of layoffs

However, Arm's listing in New York could have consequences for UK workers, as it could lead to the chip designer transferring its headquarters to the US from Cambridge in the UK.

Arm is already cutting one in 10 jobs in the UK division, believed to be about 350 roles, as part of a global restructuring thought to involve the loss of about 1,000 positions ahead of the IPO.

A senior source close to the company previously told us that more layoffs at the company's headquarters would be likely if the IPO goes ahead in the US as planned.

"If Arm lists on the Nasdaq or the Dow Jones there is a requirement to move the HQ to the USA," the source told us.

Last week, we reported that the UK minister for Technology and the Digital Economy Chris Philp had said the government was "working closely with" Arm management on the IPO process, and that many companies have previously launched with a dual listing in both the UK and US.

Arm was itself dual-listed before its sale to SoftBank, with the London Stock Exchange as its primary location and secondary stock held in New York.

The Register asked Arm and SoftBank for their views regarding the threat of invoking NSIA, but neither company had responded at the time of publication. If we receive any response, we will update accordingly.

Although the NSIA only came into force at the start of the year, it has already been used in at least two cases involving technology companies; an assessment has been called on the investment in Brit mega telco BT by French telco tycoon Patrick Drahi, who upped his stake to 18 percent late last year, making him the largest current shareholder in BT Group via his Altice UK investment vehicle.

Another security assessment is underway into Newport Wafer Fab's acquisition by China-controlled entity Nexperia last year. Although this deal has already closed, the Act may allow the government to undo the sale if it believes there are national security grounds for doing so.

The UK government also previously intervened in SoftBank's planned sale of Arm to Nvidia, referring the deal to the nation's Competition and Markets Authority last year over fears that it might stifle competition in the chip market where chip designer Arm is seen as a neutral player.

Scrutiny such as this, and from other regulatory bodies in the EU, US and China, were cited as reasons for the sale falling through and SoftBank deciding to float Arm on the stock market instead. ®

Broader topics


Other stories you might like

  • UK government still trying to get Arm to IPO in London
    Would give its right, er, leg, to keep HQ – and jobs – in Britain

    The UK government is continuing efforts to have chip designer and licensor Arm listed on the London Stock Exchange after its public offering rather than New York, as is the current plan.

    At stake is whether Arm moves its headquarters to the US, potentially leading to the further loss of UK jobs.

    Speaking to the Financial Times, UK minister for Technology and the Digital Economy Chris Philp said the government was still "working closely with" Arm management on the IPO process, despite its parent SoftBank having previously indicated that it was planning to list Arm on the Nasdaq stock exchange in New York.

    Continue reading
  • Cisco warns of security holes in its security appliances
    Bugs potentially useful for rogue insiders, admin account hijackers

    Cisco has alerted customers to another four vulnerabilities in its products, including a high-severity flaw in its email and web security appliances. 

    The networking giant has issued a patch for that bug, tracked as CVE-2022-20664. The flaw is present in the web management interface of Cisco's Secure Email and Web Manager and Email Security Appliance in both the virtual and hardware appliances. Some earlier versions of both products, we note, have reached end of life, and so the manufacturer won't release fixes; it instead told customers to migrate to a newer version and dump the old.

    This bug received a 7.7 out of 10 CVSS severity score, and Cisco noted that its security team is not aware of any in-the-wild exploitation, so far. That said, given the speed of reverse engineering, that day is likely to come. 

    Continue reading
  • Restructure at Arm focused on 'non-engineering' roles
    Meanwhile, CEO wants to vacuum up engineering talent amid return to stock market

    Updated Arm today told The Reg its restructuring ahead of its return to the stock market is focused on cutting "non-engineering" jobs.

    This is after we queried comments made this morning by Arm chief executive Rene Haas in the Financial Times, in which he indicated he was looking to use funds generated by the expected public listing to expand the company, hire more staff, and potentially pursue acquisitions. This comes as some staff face the chop.

    This afternoon we were told by an Arm spokesperson: "Rene was referring more to the fact that Arm continues to invest significantly in its engineering talent, which makes up around 75 percent of the global headcount. For example, we currently have more than 250 engineering roles available globally."

    Continue reading
  • Arm says its Cortex-X3 CPU smokes this Intel laptop silicon
    Chip design house reveals brains of what might be your next ultralight notebook

    Arm has at least one of Intel's more capable mainstream laptop processors in mind with its Cortex-X3 CPU design.

    The British outfit said the X3, revealed Tuesday alongside other CPU and GPU blueprints, is expected to provide an estimated 34 percent higher peak performance than a performance core in Intel's upper mid-range Core i7-1260P processor from this year.

    Arm came to that conclusion, mind you, after running the SPECRate2017_int_base single-threaded benchmark in a simulation of its CPU core design clocked at an equivalent to 3.6GHz with 1MB of L2 and 16MB of L3 cache.

    Continue reading
  • Intel is running rings around AMD and Arm at the edge
    What will it take to loosen the x86 giant's edge stranglehold?

    Analysis Supermicro launched a wave of edge appliances using Intel's newly refreshed Xeon-D processors last week. The launch itself was nothing to write home about, but a thought occurred: with all the hype surrounding the outer reaches of computing that we call the edge, you'd think there would be more competition from chipmakers in this arena.

    So where are all the AMD and Arm-based edge appliances?

    A glance through the catalogs of the major OEMs – Dell, HPE, Lenovo, Inspur, Supermicro – returned plenty of results for AMD servers, but few, if any, validated for edge deployments. In fact, Supermicro was the only one of the five vendors that even offered an AMD-based edge appliance – which used an ageing Epyc processor. Hardly a great showing from AMD. Meanwhile, just one appliance from Inspur used an Arm-based chip from Nvidia.

    Continue reading
  • Arm most likely to list on the Nasdaq, says SoftBank CEO
    Hopes of securing London listing for UK chip designer may be in vain

    Arm is most likely to list on the US stock exchange Nasdaq, according to Masayoshi Son, chief executive of SoftBank Group, which bought the chip designer in 2016 for $32 billion.

    Although he stressed no final decision had been made, Son told investors that the British chip designer was better suited to a US listing. "Most of Arm's clients are based in Silicon Valley and... stock markets in the US would love to have Arm," Son told shareholders at the company's annual general meeting.

    He said there were also requests to list Arm in London without elaborating on where they came from. The entrepreneur did not say whether the conglomerate is considering a secondary listing for Arm there.

    Continue reading

Biting the hand that feeds IT © 1998–2022