Investors are analysing the potential benefits and drawbacks of buying shares of Arm as it prepares to begin trading on the Nasdaq on Thursday.
The British chip manufacturer acknowledged a number of risks in its IPO prospectus, including geopolitics and its China business, but as the listing date approaches, one possible concern is starting to gain traction.
RISC-V, or “risk five,” is the name of a competing chip architecture that has the support of some of Arm’s own clients.
Arm has issued a warning that if it gained popularity, it might represent a competitive concern, despite analysts telling CNBC that it is not an immediate threat.
RISC-V: What is it?
Let’s think about what Arm does in reality to better comprehend RISC-V. For processor or central processing unit (CPU) chips, Arm creates what is known as an instruction set architecture (ISA). An electronic device’s brain can be compared to these chips.
Actually, other firms like Apple and Qualcomm base their chips on Arm’s ISA, which serves as the design for processors.
To exploit Arm’s technology to create their own chips, these businesses must pay licencing fees. Additionally, it receives royalties when these chips are created and used in finished products. 99% of all cellphones in use today use processors built by Arm.
Source (CNBC)
