ARM specialist Arm is not satisfied with just selling licenses and chip designs. The company wants a bigger piece of the pie and is working on building and launching its own chips.
Arm still wants to build and sell its own microchips. This is reported by the Financial Times. The company is considering the development of “complete solutions”, confirms CEO Rene Haas on the sidelines of the quarterly results publication. To absorb more revenue from the semiconductor sector, Arm wants to be active higher up the design stack. Rumors about Arm’s ambition have been circulating since February and are now being confirmed again.
Focus on Designs
The move could thoroughly shake up the sector and potentially disrupt Arm’s relationship with customers. Today, Arm designs chips based on the ARM architecture. This includes designs for processor cores for mobile applications under the Cortex name, as well as data center designs under the Neoverse label.
Customers pay licensing fees for these designs and integrate them into their own chips. Think of MediaTek combining Cortex CPUs into smartphone chips, or AWS building its Graviton 4 chips for the data center around Neoverse V2. The new European Rhea1 exascale processor developed by SiPearl also uses Arm’s Neoverse designs as a basis.
Competition with Own Customers
The model has made Arm an omnipresent player. The company sells ARM designs as a neutral partner to the entire sector, with customers ranging from Qualcomm to Nvidia. However, Arm wants more.
The company reasons that margins are higher with customers. Therefore, Arm now wants to market chips based on its own designs. This would put it in full competition with its own customers.
Concrete plans are not yet known. However, Arm saw the stock market react unenthusiastically to its quarterly results. The plan to compete with its own customers could generate additional revenue in the short term, which the stock market particularly likes. How it would affect the chip ecosystem in the long term is difficult to predict. The IT sector is teeming with partners who are each other’s competitors, so the situation is certainly not unprecedented.