Ampere IPO: What do we know about the Ampere IPO?
Ampere, the semiconductor chip developer, filed for an IPO in April 2022. But an unpredictable market has persisted ever since, delaying many IPOs scheduled for the year. However, founder and CEO Renee James insists that Ampere has refreshed its filing and is ready to go public once the microchip startup feels the market is ready.
In the company’s initial filing, Ampere did not specify the number of shares that will be offered or an expected price range, stating that these details still need to be determined. Be on the lookout for them once Ampere has announced an official public offering date.
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What is Ampere?
Ampere is an American technology company that develops cloud-native microprocessors, which are a type of semiconductor that contains the circuitry used by a computer’s central processing unit (CPU). These microprocessors are used for a number of high-performance computing applications such as mobile gaming, media encoding, massive databases, AI inference processing and more – known as workloads.
Ampere’s products are distinguished from traditional enterprise-class microprocessors, which are not as responsive and forgiving when running cloud-based software. Ampere’s cloud-native microprocessors can better handle the practically infinite number of workloads available through the cloud.
The company was founded in 2017 by Renee James, the former president of Intel. Since then, Ampere has worked in some capacity with a range of companies, including Arm, Nvidia, Microsoft, Hewlett Packard Enterprise and Google.
Ampere is fabless, meaning the fabrication of its semiconductors is done offsite, and its products are manufactured by Taiwan Semiconductor. The company licenses semiconductor designs from Arm, a British semiconductor and software design company.
Because Ampere’s processors are cloud native, they aim to better meet the high performance and power efficiency of cloud applications. Enterprise-class processors, the standard before cloud-native, can struggle when applied to shared cloud infrastructure.
Cloud-native processors are able to manage the ‘infinite’ uses and resources accessible in cloud computing. They basically can host more users per server and accommodate cloud-native software applications, which are known for continuous integration and delivery of updates.
How much is Ampere worth?
Ampere filed confidentially, meaning the financial performance and operational costs of the company are not public information. However, in October 2021 Softbank valued the company at $8 billion while considering an investment.
How does Ampere make money?
Ampere makes money through the sale of its microprocessors. Amper has secured many high-profiled partnerships for its Altra-brand, ARM-based processors including Microsoft, HPE and Google.
Who has invested in Ampere?
Ampere’s last round of funding took place in April 2022, with Oracle as the sole backer and investing $300 million. In total Ampere has received more than $850 million over eight rounds of funding.
Ampere’s three investors:
- The Carlyle Group was Ampere’s first investor and employees James as an operating executive
- Arm Holdings, a subsidiary of SoftBank Group, invested in Ampere in 2019 and licenses their microprocessor designs to the company in exchange for ARM-based Ampere servers
- Oracle has invested over $400 million during multiple funding rounds and uses Ampere Altra processors in several applications. James also sits on its board of executives
Is Ampere profitable?
There is currently no public information on Ampere’s financial performance. However, Oracle’s third quarter results of 2022, published in April, suggested a lower-than-average earnings report was due to operating losses at several companies including Ampere.
Who are Ampere’s competitors?
Ampere’s competitors include market-dominating microprocessor companies like AMD, Intel and NVIDIA. Nvidia covers devices for complex areas such as high-end gaming, video and 3D work. Intel and AMD chips are used in a majority of basic to mid-range computers intended for casual work use and gaming.
Nvidia’s market cap is the largest by far at $402B. Intel sits at $119B and AMD at $118B.* However, Intel boasts the most revenue, with $79B in 2021. Followed by NVIDIA with $26.9B and AMD with $16.4B for the same year.
*according to companiesmarketcap for 2021
While these companies are the most competitive in the field, Ampere is nowhere near their level. For example, the company reported 800 employees in 2021 while Nvidia and AMD both have over 10,000. Meanwhile Intel employs more than 100,000 people.
Ampere chips account for less than 1% of the server market dominated by these three companies.* However, they’ll hope that their cloud-native processors can rival chips made by established players.
*according to Forbes
What is Ampere’s business strategy?
Ampere’s business strategy is entirely based on its cloud-native processors. Instead of creating specialised microprocessors focused on specific workloads, Ampere creates versatile and adaptive processors whose cloud capabilities distinguish them from their competitors.
Ampere’s 128-core processor released in 2021 has more cores than any other microprocessor. The high number of cores is useful for addressing infrastructure workloads which take advantage of scale-out and elastic cloud architectures. The cloud-native design of Ampere’s microprocessors means it is optimised for a variety of cloud services and workloads such as data analytics, artificial intelligence, database storage, edge computing and web hosting.
Who owns Ampere?
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 by SoftBank's Arm subsidiary and Oracle. Oracle's investment in Ampere began in 2019 with $40 million, which amounted to less than 20% of the company’s shares. However, since investing over $400 million, Oracle is now speculated to own possibly 50% of Ampere.*
*according to The Register