The UK-based company, owned by SoftBank, has historically focused on licensing its chip designs to major technology firms such as Apple and Nvidia. However, sources familiar with the plans have indicated that Arm’s chief executive, Rene Haas, will introduce the new processor as early as this summer.
The move represents a radical transformation for Arm, which has previously provided the foundational blueprints for chips rather than manufacturing processors. This change could disrupt the balance of power within the $700 billion semiconductor sector, positioning Arm in direct competition with some of its largest customers.
Following the revelation of these plans, Arm’s share price surged by over 6 per cent.
SoftBank’s founder, Masayoshi Son, has positioned Arm at the centre of his ambitious vision to construct a vast artificial intelligence infrastructure network.
The launch of Arm’s chip is a crucial component of this strategy. Son recently introduced the Stargate initiative, a project involving OpenAI, Abu Dhabi state fund MGX, and Oracle. The cunning plan is to invest approximately $500 billion in AI infrastructure. Microsoft and Nvidia have also been named key technology partners in the venture.
The new processor is expected to be a CPU designed for servers in large data centres and will provide a base that can be customised for clients, including Meta. Manufacturing will be outsourced, with TSMC identified as a potential production partner.
In addition to its chip development efforts, SoftBank is reportedly nearing the acquisition of Ampere, an Oracle-backed chip designer specialising in Arm-based server chips. The deal, valued at nearly $6.5 billion, supports Arm’s expansion into chip production.
Since its Nasdaq listing in 2023, Arm’s valuation has more than doubled, reaching $160 billion. This surge has been driven by growing investor interest in AI and Arm’s expanding role in data centres operated by major firms such as Nvidia and Amazon.
Meta has joined the list of technology giants investing in Arm’s technology for server chips, moving away from traditional suppliers such as Intel and AMD.
Meta’s chief financial officer, Susan Li, confirmed its plans to extend its custom silicon efforts to AI training workloads to improve efficiency and performance.
Meanwhile, Arm’s chip is expected to play a key role in a separate AI-powered personal device initiative led by former Apple design chief Sir Jony Ive in collaboration with OpenAI’s Sam Altman and SoftBank.
Arm’s designs have been used in more than 300 billion chips globally, including nearly all smartphone processors. Its power-efficient architecture has made it an increasingly attractive alternative to Intel’s CPUs in PCs and servers, particularly as AI-driven data centres face mounting energy demands.
Initially founded in Cambridgeshire 35 years ago, Arm rose to prominence by licensing its designs to mobile chipmakers such as Qualcomm and MediaTek. Maintaining its position in this highly competitive market has required careful strategic manoeuvring.
Under Rene Haas, who became chief executive in 2022, Arm has pivoted towards securing higher royalty revenues by designing more critical chip components. However, the decision to manufacture its processors represents a bold escalation that could strain relationships with existing clients, including Qualcomm, which is currently embroiled in a legal dispute with Arm over licensing terms, and Nvidia, the most valuable chipmaker in the world.
