According to the British “Financial Times” report, people familiar with the matter said that Arm, a chip design company under SoftBank Group, will work with manufacturing partners to develop its own semiconductors, seeking to attract new customers and complete the project later this year. Drive company growth after IPO.
Cambridge, England-based chip design company Arm’s products are used in more than 95% of the world’s smartphones, including major manufacturers such as Apple, Qualcomm and MediaTek. However, Arm does not directly produce chips but sells the design drawings to chip manufacturers for them to implement and produce. This model has made Arm the “Switzerland” of the semiconductor industry, not directly competing with customers, but also earning huge profits.
Recently, however, Arm has a bold plan: The company will build its own chips, show off its design capabilities and performance advantages, and attract more customers and investors. According to people familiar with the matter, the chip will be Arm’s most advanced chip-making attempt ever, and the goal is to be used in mobile devices, laptops and other electronic products. Arm has formed a new “solutions engineering” team to lead the project, led by chip industry veteran Kevork Kechichian, who was previously the head of development for Qualcomm’s flagship Snapdragon chips.
The reason why Arm has such a move has a lot to do with its parent company Softbank. Softbank is a Japanese investment group that acquired Arm for US$32 billion (currently about 220.48 billion) in 2016 and plans to list it on Nasdaq in New York later this year. In order to improve Arm’s profitability and market appeal, Softbank pushed Arm to change some business models and pricing strategies and also increased investment in R&D and innovation.
However, Arm’s chipmaking plans have also raised some concerns and doubts. On the one hand, if Arm did make a good chip, would it consider selling or licensing it to other companies, thus becoming a competitor to its own customers? Will doing so damage Arm’s neutrality and credibility in the industry? On the other hand, chip production is not an easy task, requiring a lot of capital, technology and time investment. Even giants like Apple and Qualcomm need to iterate and improve through multiple generations of products to reach today’s level. Does Arm have enough strength and patience to go through this road?
At present, Arm has not publicly disclosed the specific details and progress of its chip production plan. It is reported that the plan is only a prototype test and has no intention of commercialization. But in any case, this shows Arm’s ambition and determination in the semiconductor field, and it also adds more highlights and topics to its upcoming listing.