Alphawave IP Group, the Anglo-Canadian silicon chip designer, today announced plans for a $4.5bn IPO on the London Stock Exchange, reversing the usual pattern on European companies going to North America to list.
The company also plans to open an R&D centre in Cambridge. Cambridge was the birthplace of many of the UK’s biggest chip companies, including Arm and Infineon.
“We have chosen to come to the UK for the deep pools of knowledge that exist here,” said John Lofton Holt, Alphawave IP’s executive chairman, although he acknowledged that “going public in the UK is not easy”.The recent London Stock Exchange debut of food delivery company Deliveroo, for example, was a disaster and the stock continues to trade at 30% below its listing price.
Alphawave IP designs connectivity chips that allow massive amounts of data to be transferred faster and using less power. There is a growing market for better connectivity chips as AI-enabled devices, autonomous cars and robots have a need to transmit vast amounts of information to the data networks that support them. Alphawave IP claims to be the only pure high-speed connectivity IP provider that can transmit data at 112 gigabits per second — and it is working on getting that to 224 gigabits per second.
The development of AI has opened up the chip market for a number of new entrants — Bristol’s Graphcore is another recent example of a young company that has been able to challenge vastly larger incumbents like Nvidia because of their specialism.
Lofton Holt said he expected this to be a $50bn addressable market by 2024.
Alphwave IP is something of a novelty in that it is already profitable (since 2018) — unlike the recently listed Deliveroo and Darktrace which plans to list next month. The company increased revenues by 200% between 2019 and 2020 and made $75m in sales last year. Operating profit was $17.5m last year.
Lofton Holt said the IPO would help it expand its portfolio of products.
The listing will be underpinned by some $500m of commitments from BlackRock and Janus Henderson.