Arm, the Cambridge-based microchip manufacturer owned by Japansese Company SoftBank, has declined PM Rishi Sunak’s push to list on the UK stock exchange, in a major blow to London’s tech ambitions.

Instead, the company has opted for a US listing, despite Sunak’s plans to make the UK a friendly environment for chip manufacturers.

Arm decided that the US-only listing was the “best path forward” for the company despite talks with Sunak, though Chief executive Rene Haas did state they would consider a UK listing “in due course.”

The UK company was acquired by SoftBank in 2016 – it previously had a dual listing on both Nasdaq and the London stock exchange.

Opting to forgo a London stock option had caused concerns for UK businesses and regulators who are struggling to attract tech companies, as many turn to the US marketplace for less regulations and higher profiles.

Sunak was the third PM to put pressure on the semiconductor company to list in the City of London, after Boris Johnson and Liz Truss attempted the same.

Arm says it had been in talks with the Financial Conduct Authority and British government for several months before making the decision.

Despite the turn to the US, Arm is maintaining its UK headquarters and operations and is opening a new location in Bristol.

A government spokesperson said: “The UK is taking forward ambitious reforms to the rules governing its capital markets, building on our continued success as Europe’s leading hub for investment, and the second largest globally.

“We continue to attract some of the most innovative and largest companies in the world – and note Arm’s commitment to expanding its presence in the UK, providing a boost to growth, jobs and investment.”

There has been pressure on the UK’s semiconductor strategy amid a global shortage due to exacerbated demand during the pandemic. The UK could fall behind, though Arm is maintaining their UK headquarters.

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Not listing in London is a blow to Sunak’s plans to make the UK a science superpower, as well as Chancellor Hunt’s ambitions to make the UK the next ‘Silicon Valley.’

As reported by the Financial Times, the FTC’s regulations surrounding listing played a major part in Arm’s final decision.

Currently, publicly listed companies in the UK market must gain investor approval for any transactions – in the US, they only need to report transactions without waiting for an agreement.

The lack of flexibility likely prevented Arm from seeking a dual listing this year.