Arm is reportedly developing its own chips to attract new customers

Based in England and owned by Japan's SoftBank, Arm is the company that designs the CPU cores found in most smartphones in the world (approximately 95% of them). It also is responsible for the Mali brand of graphics processing units (GPU). According to the Financial Times (via Slashdot), Arm is developing its own chips. But no, Qualcomm, MediaTek, Samsung, and others need not be concerned. The chips are being produced to help the company show off its designs and to attract new customers."

Those who have been briefed on the move say that this is being done to attract more business and hike revenue and profits before Arm attempts to get listed on the NASDAQ market which would make it a public company in the U.S. You might recall that GPU designer Nvidia offered to buy Arm for $40 billion in September 2020. The deal, which would have merged the world's largest supplier of GPUs (Nvidia) with the third largest, never was completed as there were too many issues to get the largest semiconductor transaction in history over the finish line.

Arm is hoping that its new prototype chips will demonstrate how powerful its designs can be. The company has built test chips before in partnerships with both of the world's most cutting-edge foundries, TSMC and Samsung. But these new chip designs are said to be more advanced than found on previous semiconductors. As it turns out, the head of Arm's engineering team developing the prototype chips, Kevork Kechichian, worked at Qualcomm and ran the project that led to the development of the fabless chip designer's Snapdragon chip.

This news might get some of Arm's customers like Qualcomm and MediaTek nervous about Arm looking to compete in the chip market. But that would be shooting itself in the foot and Arm says that it has no plans to license or sell the chips and is only having prototypes made. These prototype chips will be built for mobile devices, laptops, and other electronics. The report says that Arm is working to improve the performance and security of its designs would would have positive implications for smartphone users.

The project started six months ago and last year 22 of Arm's customers made up a whopping 86% of its business. The concern is that if a small number of customers decide to defect, a large chunk of Arm's business could go with them. And Wall Street would prefer to see a wider customer base.