LOUGHBOROUGH UNIVERSITY

ARM Holdings Valuation Report
12BSP058: Financial Statement Analysis & Business Valuation
Group: Airan Zhang, Chao Liu, Jun Wang, Tong Qian

ARM Holdings Valuation Report
ARM Holdings is a semiconductor intellectual property (IP) supplier famous as low power compensation, high performance digital products. It was founded in 1990 in Cambridge UK, now has become an world’s leading semiconductor IP company which employing over 2,300 people and having 28 offices around the world. ARM licenses its technology as IP rather than manufacturing its own CPUs. Due to its own business model, the whole embodies all resources. The authorized capital can support the company cost and the royalties generated can be used as company revenue. Sectorial Analysis In 1990, the EU signed a voluntary agreement with Japanese government that stipulate the lowest price of the Japanese standard memory chip production in the European Common Market. Additionally, the European Commission anti-dumping measures not to accept the South Korean semiconductor supplier in 2007. The reason is that the Korean dumping the chip prices significantly lowers than the EU's acceptable price. The UK as second largest producer in electronics and semiconductors field its chip design technology has attracted worldwide attention. The UK has a free and high competitive market with a mature customer base than any other European countries. A rich source of investment funds and high-tech enterprise group provide high skills to development and research base. Strong government support including giving tax allowance and encouraging the establishment of joint research institution etc. makes British have extremely research and development activities. The UK also has 70 universities involved in semiconductor research. Obviously, global economic is in the rescission since mid-2007 to now. In recent