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British microchip specialist, Imagination Technologies, is reportedly preparing for an initial public offering (IPO) in New York, following the successful IPO of Arm, another chip designer. The move comes after Imagination Technologies was delisted from the London Stock Exchange in 2017, following a $742 million privatization by Canyon Bridge, an investment group backed by China. The company's re-entry into public markets was initially reported by the U.K.’s Sunday Telegraph.
The recent success of Arm's IPO, which achieved a valuation of $54 billion and marked the largest IPO this year, has sparked optimism on Wall Street about a potential revival in capital markets and an increase in listings. Imagination Technologies operates under a similar business model to Arm's, licensing its semiconductor intellectual property to other companies.
Imagination Technologies counts Apple (NASDAQ:AAPL) among its clients and focuses on four key areas, one of which includes neural network accelerators. These accelerators are crucial for powering artificial intelligence (AI) applications in various sectors such as autonomous vehicles and cloud computing. This could position the company as a more direct AI investment opportunity if it goes public.
Unlike Arm, which primarily focuses on mobile processors, Imagination Technologies might offer investors a more focused AI investment opportunity. The growing investor interest in artificial intelligence this year has positively impacted shares in chip companies such as Nvidia (NASDAQ:NVDA) and has also favored Arm's preparations for its public listing.
In terms of financial performance, Imagination Technologies reported an annual revenue increase from £111 million in 2021 to £120 million ($149 million) in 2022, according to recent filings in the U.K. The company noted that some of its target markets, particularly automotive, have shown greater resilience than the overall semiconductor market.
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