A public offering will allow Ampere to raise additional investment funds needed to grow its Arm-based server chips and the broader ecosystem around them.
The data center market is currently dominated by X86 chips offered by Intel and AMD, but recent trends have seen Arm-based systems being adopted by cloud providers, leading TrendForce researchers to predict that 22 % of data center servers could be Arm-based by 2025.
Ampere was founded in 2017 by CEO Renee James, former president of Intel. Ampere is owned and funded by the Carlyle Group, as well as SoftBank’s Arm subsidiary itself and Oracle. Oracle’s investment in Ampere began with $40 million in 2019, which then represented less than 20% of the company’s stock.
However, according to recent reports, Oracle may now own up to 50% of Ampère, based on Oracle’s recent Q3 22 results, where it attributed part of its lower earnings to an operating loss. at Ampere.
The road to an Arm-based server ecosystem is littered with companies that have tried and failed to create a viable server platform, including Broadcom, Qualcomm, and AMD, but Ampere has been more successful than most.
Microsoft recently added Arm-powered virtual machines to its Azure cloud platform based on Ampere Altra server processors, following Oracle, which has been selling Arm-powered instances based on Ampere Altra processors since 2020.
VMware also added support for Ampere’s Altra chips to the release of its ESXi hypervisor for the Arm architecture last year, though this is mostly experimental.
Gartner’s Priestly added:
“Ampere has [had] design wins at Oracle and a number of T2 CSPs and recently Microsoft announced plans for Azure on Arm using Ampere processors. However, while these design gains and AWS’ use of its Arm-based Graviton establish a foothold for Arm in the cloud data center, x86 vendors are not standing still and continuing to push their designs forward – both in terms of performance and functionality.
“Vendors like Ampere must continue to invest in their designs to compete with x86 – which, given the need to take advantage of edge manufacturing nodes, is an expensive proposition, even if ASP chips in the data center are high , the total market is not large, especially compared to other Arm-based markets such as smartphones – hence the need for successive rounds of venture capital funding or an IPO.
He concluded, “Ampere is currently the only vendor with a commercial Arm-based processor for servers, so much of the software ecosystem will fall to Ampere if it wants to expand its footprint beyond of the cloud, which requires an investment in resources.
News of Ampere’s potential IPO comes after Arm himself proposed an IPO following the collapse of its sale to Nvidia by current owner SoftBank in February. This IPO is expected to value the chip designer up to $60 billion.
Korean chipmaker SK Hynix is reportedly considering forming a consortium to acquire Arm, a consortium that may well include Intel, according to remarks made earlier by CEO Pat Gelsinger. ®