SoftBank's Arm said to raise chip price designs for revenue boost ahead of IPO
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Arm, the British-based chip design unit of Japanese tech conglomerate SoftBank (OTCPK:SFTBY), is reportedly trying to raise the price of its chip designs in an effort to boost sales ahead of its upcoming initial public offering.
The company, which designs processors for electronics and licenses its technology as intellectual property to several tech companies around the world, told "several" of its clients of a "radical shift to its business model," according to the Financial Times, which cited several industry executives and former employees.
Arm, which was purchased by SoftBank (OTCPK:SFTBY) in 2016 for $32B, is looking into charging royalties based on the value of the device of which the chip is used for, as opposed to the value of the chip itself.
The company believes this change will let it earn "several times" more for each design sold, due in large part to rising smartphone prices.
In 2021, Arm saw its revenue rise 35% year-over-year to $2.7B, with adjusted earnings of $1B.
Arm's chip designs are used in devices all over the world, including Apple (AAPL) products. Nvidia (NVDA), AMD (AMD), Qualcomm (QCOM) and a host of others also license intellectual property from Arm.
The company scrapped plans for a London listing in July 2022 due to the political situation in the U.K. government at the time. Seeking Alpha reported that the resignations of a U.K. investment minister and digital minister, who had played leading roles in talks with SoftBank (OTCPK:SFTBY) led to the breakdown in talks.
However, in January, Britain's Prime Minister Rishi Sunak reportedly held talks with SoftBank (OTCPK:SFTBY) about a London-based IPO, with the talks described as "very constructive" and "positive." 
Last month, Arm CEO Rene Haas said the semiconductor design company was "committed" to having an IPO this year.