Arm plans to develop its own chips

Arm plans to develop its own chips

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Arm plans to develop its own chips




Arm plans to develop its own chips



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One of the world’s leading chip technology providers Arm Holdingsis preparing for a move that will attract attention in the industry. The company pays licensing fees to 300 percent While planning to increase up to developing own chips He also discussed his strategy. This move shows that the company can enter into direct competition with giants such as Apple, Qualcomm and Microsoft, which are among its largest customers.

Arm has been known for decades for its technologies used in a wide range of products, from smartphones to energy-efficient data center chips. The company licenses the design to its customers and receives a low-rate royalty fee on each chip produced. However, this modest business model is likely to change under the leadership of SoftBank CEO Masayoshi Son and Arm CEO Rene Haas.

Desire to increase prices




Arm plans to develop its own chips



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Arm in the last fiscal year $3.23 billion in revenue was able to get it. In its most recent fiscal year, Apple’s revenue from hardware products powered entirely by Arm-based chips was more than 90 times that amount. However, the information reflected in the court documents reveals that Arm is determined to change this situation.

Arm’s price increase strategy was shaped within the scope of a project launched in 2019 and codenamed “Picasso” within the company. As part of this goal, Arm plans to increase the licensing fees its customers pay for chips designed with the latest Armv9 architecture, aiming to generate $1 billion in additional revenue. However, technology giants such as Apple and Qualcomm have the technical capability to design their own chips without benefiting from Arm’s off-the-shelf technologies. Therefore, the plans are risky.

Plan to produce own chips

One of the most striking aspects of Arm’s aggressive strategy is that the company plans to develop its own chips. According to documents and testimony filed in court by CEO Rene Haas, instead of simply offering chip design templates, Arm directly producing chips or chip modules is evaluating.

Experts state that this move could be a major concern for Arm’s existing customers. Although Arm has never gotten into the chip design business, it is always evaluating possible strategies, Haas said.

Arm’s pricing policy and strategy also affects its relationships with other giant companies. According to court documents, SoftBank and Arm executives met with Samsung in 2022 and stated that Qualcomm’s Arm license would expire in 2025. This caused Samsung to reduce its three-year chip supply agreement with Qualcomm to two years.