Alphawave To Launch Its London IPO On A Tide Of Demand For Semiconductor Chips

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Alphawave To Launch Its London IPO On A Tide Of Demand For Semiconductor Chips
  • Leading semiconductor IP company focusing on connectivity challenges created by the explosion of data expected to launch its IPO on May 13th

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Q1 2021 hedge fund letters, conferences and more

  • Expected to price at 410p which would value the company at around £3bn
  • Final price is expected to be announced at 7am on May 13th
  • 228m shares are expected to be issued, which would raise £936m
  • Retail investors weren’t invited to participate in the IPO but can buy via the secondary market once the shares are listed.
  • Due to ISA and SIPP rules, shares can only be purchased through these accounts when unconditional trading starts is expected to start on May 18th

Alphawave's IPO Launch

"With IPOs timing is everything and Alphawave launches onto the market on a tide of demand for semiconductors, with shortages of chips disrupting production of cars and electronic goods across the world.

Alphawave may be more of a niche player in the industry, developing a small part of the technology, but its launch comes at a time when companies are crying out for better connectivity to adapt to the new digital world and deal with an exponential increase in data.

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The Canadian IP firm is in the business of developing digital signal processing chip technology used to push data over networks and has displayed rapid and profitable growth since its conception just four years ago, leading to a valuation expected to be around £3 billion.

Luring a tech firm from across the Atlantic in such a sought after industry segment is being seen as a coup for London, and will help iron out the creases rucked up by the messy Deliveroo floatation.

The UK had carved out a reputational niche as a hot bed for chip development but successfully nurtured Arm Holdings was cherry picked for take-over by Japanese conglomerate Soft Bank. Arm’s value to the UK is now in the spotlight as the Competition and Markets Authority begins an investigation into its re-sale to US giant Nvidia. As that row rumbles on, it’s hoped this listing could  herald a new era for semi-conductor development in the UK, with Alphawave already setting up a research and development hub in Cambridge to capitalise on the knowledge and expertise there.

Premium Listing Requirements

Unlike other high-profile tech offerings which have hit the market over the past year, like Deliveroo and the e-commerce platform The Hut Group, Alphawave will float with only one class of shares, meeting premium listing requirements.

This should help boost interest, given the firm won’t list with governance concerns attached and already funds and accounts managed by BlackRock, and Janus Henderson, have entered into cornerstone agreements with the company to subscribe for around £510 million of shares.

A surge in demand is expected for wired technology to meet the needs of the expanding global data market and although the company’s technology may be tightly focused, the potential is huge given the company’s business model. This involves designing semi-conductor connectivity technology, licensing it to other chip companies and receiving royalties from revenues of products using chip designs.

The Semiconductor Industry Association revealed that last year global sales increased by 6.8 per cent compared to 2019 even given the pandemic disruption.

With the market for the internet of things, from autonomous cars to smart fridges expected to explode and machine learning integrated into more product and services, huge demand for chips and the technology supporting them is expected to keep increasing, which should bode well for Alphawave’s prospects’’

Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown


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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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