ARM is developing its own chips to expand business

It’s no secret that ARM’s chip designs have become the industry standard for smartphone processors, powering over 95% of the current smartphone market. However, it looks like ARM is not content with being the leader in smartphone chip designs, as the company has reportedly started developing its own chips to showcase the capabilities of its products.

According to the Financial Times, the project began six months ago and is being led by Kevork Kechichian, a former executive and designer of Snapdragon chips at Qualcomm. While ARM has previously worked with TSMC and Samsung to make semiconductors, the new chips will showcase the company’s new designs and help potentially expand its customer base to the Windows laptop and PC market as well.

Why is ARM developing its own chips?

Over the past few years, SoftBank’s push towards growth has led ARM to implement several changes in its business practices, including increasing prices and overhauling its business model by charging royalties to device-makers rather than some of its chipmaker customers. And this new move towards developing its own chips is part of the company’s efforts to diversify its income streams before going public later this year. As it stands, the significant concentration of ARM’s business, with 20 customers accounting for 86% of its revenue, is a major threat and losing even a few key customers could significantly impact the company’s growth.

However, speaking on the concerns that ARM could potentially turn into a rival of Qualcomm and Apple if successful in developing its own chips, the company stated that it currently has no plans to sell or license the designs of the chip to other companies. Instead, ARM will build these prototype chips for smartphones and laptops to improve the performance and security of its designs, which in turn would benefit its consumers.