The London stock market and the capital's wider City financial district have taken a new knock after UK-based Arm, a giant of semiconductor design, chose New York for an initial public offering.

The announcement late Thursday followed news the same day that building materials giant CRH would switch its primary market listing to New York from London, despite UK reforms aimed at attracting IPOs.

The moves are a blow for London's top-tier FTSE 100 shares index as it seeks to remain a strong global force amid increased competition following Brexit.

Arm, owned by Japanese investment giant SoftBank, reached its decision after months of talks with the UK government and British regulators.

"SoftBank and Arm have determined that pursuing a US-only listing of Arm in 2023 is the best path forward for the company and its stakeholders," Arm's chief executive Rene Haas said in a statement.

Arm said it would "consider a subsequent UK listing in due course", adding that it plans to increase its British presence with a new site in Bristol, western England, and more staff.

Brushing off news of the US listing, the government in a statement said it continued "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".

- 'Double blow' -

Analysts described it as a further knock after London already lost its crown as the top European trading centre following Britain's departure from the European Union.

"It's been hit by a double blow with both CRH and Arm choosing New York," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"The City had been pedalling hard to attract new IPOs with help from the government... but it's an uphill struggle," she told AFP.

Michael Hewson, chief market analyst at CMC Markets UK, said "it highlights a shift that appears to be taking place about the desirability of the UK as a place to do business".

The move by Arm, located in the English university city of Cambridge, comes one year after US chip giant Nvidia scrapped a blockbuster $40 billion takeover of the company following regulatory objections.

SoftBank, which purchased Arm in 2016 for $32 billion, is now seeking to offload the unit via the initial public offering in the United States.

Rather than making chips, Arm licenses architecture that enables devices to function.

Founded in 1990, Arm specialises in microprocessors and dominates the global smartphone market.

Its technology was present in Apple's first iPhone released in 2007, and Arm chips are also present in sensors, smart devices and cloud services equipment.