ARM Server-Chip Startup Ampere Computing Preps for IPO

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Ampere calculationa startup that designs Arm-based central processors for servers, said it had filed a confidential filing with the U.S. Securities and Exchange Commission for an initial public offering.

A bid would give the Santa Clara, Calif.-based company a key source of cash for expansion. Proceeds from an IPO would likely help its ambitions to capture a bigger share of the server chip market.

The company said it has started paperwork with the SEC, but does not share further details. Under SEC rules, companies can keep their listing materials private for a period before a public offering.

The number of shares to be offered and the price of the proposed IPO have not yet been determined. Ampere expects the offering to occur after the SEC completes its review. Whether the IPO proceeds will depend on market and other conditions, according to the company.

Ampere was founded in 2017 by former Intel chairwoman Renee James, who serves as the startup’s CEO and president. Ampere designs server chips based on Arm’s instruction set architecture (ISA) that aim to challenge x86 chips made by AMD and Intel. Ampere’s Altra and other Arm processors are gaining traction in the data center, as cloud giants opt for chips that rival performance while wasting less power.

The startup has raised over $425 million in funding since its inception from a very short list of investors, including Arm. Ampere raised about a year ago its largest funding round – a total of $300 million – from Oracle, which adopted Altra processors, based on Arm’s Neoverse N1 processor design, in an attempt to become more competitive in the cloud market. James also holds a seat on Oracle’s board of directors.

The Oracle-backed company is also trying to expand its cloud footprint. Microsoft entered the era of Arm server chips last week. It previewed new services on its Altra processor-powered Azure cloud platform. Microsoft said servers using Ampere’s chips offer 50% better performance per dollar than x86 equivalents such as AMD’s EPYC or Intel’s Xeon. The Altra incorporates 80 cores clocked at up to 3 GHz.

Energy efficiency is a top priority in the cloud, helping to control the sector’s share of global electricity consumption and reduce the carbon footprint of companies like AWS, Google, Microsoft, and Oracle. About 1% of the world’s electricity is siphoned off by the cloud sector. The power efficiency of Arm’s architecture, which has also made it the de facto standard in smartphones, allows many more single-threaded cores to fit on a processor.

Ampere outlived most of its rivals, including Marvell and Qualcomm, which halted research and development on Arm server chips. This left Ampere as one of the last remaining players in space.

While Ampere has managed to appeal to customers who run huge cloud data centers, it’s nowhere near dethroning the server processors of AMD and Intel processors – and underlying x86 ISAs – that dominate the data center.

Few companies have deep enough pockets to develop a server processor, a class of data center chips that often sell for thousands of dollars each. The proposed IPO would give Ampere a new way to access capital over time, by selling shares in the public market. The capital could help it cope with soaring chip development costs and expand its efforts to attract new customers.

Although the company currently uses Arm’s Neoverse N1 cores for its 128-core Altra and Altra Max chips, which were released in 2020 and 2021, it plans to pull a page from Apple’s playbook and develop cores. from scratch for future generations. It will start with a 5nm server processor planned for 2022. This requires a so-called “architectural” license from Arm, which has a higher cost than Arm’s standard. Processor cores.

The startup could use IPO funds to hire more engineering talent and accelerate development of chips with better performance per watt than x86 alternatives and Arm’s off-the-shelf processor plans.

The filing comes as Arm reportedly prepares for an IPO after its plan to sell it to NVIDIA for $40 billion collapsed. Since the deal fell apart earlier this year, Arm has apparently opted for an IPO as a backup plan.

Other startups in the semiconductor industry are also weighing the pros and cons of an IPO. SiFive, a startup designing processor cores based on the RISC-V ISA, said last month it was preparing for an IPO by 2024.

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