The British semiconductor company ARM is no longer just a chip designer; it will start producing its own chips this year. Meta will be the first customer for these chips.
This new plan indicates a major shift in ARM’s business model. Previously, the company licensed its chip designs to clients like Apple and Nvidia. Now, it will begin manufacturing its own chips.
According to sources cited by the Financial Times, ARM’s CEO, Rene Haas, might unveil the company’s own chips by next summer.
Since its founding in 1990, ARM’s designs have led to the production of over 300 billion chips. Nearly all smartphones worldwide are based on ARM technology.
By moving from chip design to full processor manufacturing, ARM will compete directly with some of its major customers, such as Apple and Nvidia.
This shift means ARM is entering a market where it previously sold its designs, but now it will produce its own chips, marking a significant change in the $500 billion semiconductor industry.
ARM has not commented on this matter. However, after the Financial Times report was published, the company’s shares rose by more than 6%.
The report also mentioned that SoftBank founder Masayoshi Son’s big plan involves ARM’s chip production. Through this, he aims to generate more profits from SoftBank’s intellectual property (IP), which includes AI chip production and creating a large AI infrastructure network.
Last month, Son announced his ‘Stargate’ initiative, which will collaborate with OpenAI to build an AI infrastructure at a cost of about €400 billion. The project is financed by the Abu Dhabi sovereign fund MGX and Oracle, with ARM joining as a key technology partner alongside Microsoft and Nvidia.
ARM’s chip will work as a central processing unit (CPU) for use in servers at large data centers. The chip will be customizable for various clients, including Meta. Its production will likely be outsourced to companies like Taiwan Semiconductor Manufacturing Company (TSMC).
Additionally, ARM’s parent company, SoftBank, may acquire ‘Ampere’, a chip design company that creates ARM-based chips and is supported by Oracle. This deal could be worth approximately $6.5 billion.
Since ARM’s listing on the Nasdaq in 2023, its market value has doubled to $173 billion, driven mainly by investor interest in artificial intelligence (AI). Prior to this, ARM was listed on the London Stock Exchange, but it was acquired by SoftBank in 2016.
Meta has started using ARM’s energy-efficient server chips instead of those from Intel and AMD.
ARM’s chip usage in data centers has increased through partnerships with Nvidia and Amazon. AI assistant technologies like OpenAI, Meta, and Anthropic are run through these data centers.
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