The threadbare UK semiconductors sector could be revitalised if the mooted stock market return of Imagination Technologies and ARM goes to plan.

This would be good news for the diversity and health of the UK stock market.

There are reports that former FTSE 100 UK chip designs champion ARM is seeking to rejoin the stock market, with chief executive Simon Segars apparently looking at a 2023 IPO.

ARM’s controversial £24.3bn takeover by Japan’s Softbank in 2016 was widely condemned by critics, including Hermann Hauser, one of the company’s founders who helped spin it out of the old Acorn Computers in 1990.

Lord Myners, the former City minister, called the takeover an example of shareholders selling out for a high price but with little regard for the long-term health of British industry.

Cambridge-based ARM designs microchips used in most smartphones, including premium handsets made by Apple and Samsung. In 2015, more than 15bn microchips built to ARM designs were sold, reportedly more than US rival Intel had sold in its history.

Canyon Bridge, the China-backed private equity owner of Imagination Technologies, has confirmed plans to relist the UK-based graphics chip designer, possibly in London, although New York and Hong Kong stock markets are also under consideration.

Returning Hertfordshire-based Imagination Technologies to public ownership now seems to be the best option for Canyon Bridge. The UK Government has reportedly raised concerns over a potential move to China after recent attempts to appoint new directors to Imagination’s board.

‘The objective would be an IPO over the next few years,’ Ray Bingham, Imagination’s interim chief executive told the Financial Times.

Reports have since emerged that Imagination and Canyon Bridge have held talks with the UK’s Culture Minister to discuss their ongoing commitment to stay Britain-based.

Imagination emerged as one of the world’s leading designers of graphics chips, or graphics processing units (GPU). They are used to run the slick visuals on millions of smartphones, computers and gaming consoles.

But it was bought out in 2017 by Canyon Bridge in a £550m deal after the chip designer lost its contract to supply its main customer Apple. The latter wanted to develop more of its graphics technology in-house, leading shares in Imagination to plunge 70%.

The sales of ARM and Imagination were the first of several takeovers of UK chip designers. Bluetooth connectivity developer CSR and audio chip designer Wolfson Microelectronics also fell into overseas hands, leaving the UK stock market’s technology hardware sector stripped bare.

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