It will be an interesting move by the company which, according to the article, will be teaming up with manufacturing partners to develop the new semiconductor. The company has already created a ‘solutions engineering’ team that will lead the development of these prototype chips.
Arm is a major supplier of IP to many chip companies around the world and is especially strong in mobile phones and has partnerships with major chip contract manufacturers. If it’s looking to create its own chips it will be doing so to attract new customers and fuel growth.
While Arm has no plans, according to the FT, to sell or license the product it’s not clear why Arm has decided to produce its own chip – even if it is ‘just’ a prototype.
Could it be looking to compete with its own customers by adopting a fabless semiconductor business model? It signed an agreement earlier this month with Intel to ensure that chips and other products that use its technology can be made in Intel's factories. Or is it simply looking to boost revenues at a time when its owner, SoftBank, has debts of over $170bn?
It needs to tread carefully as its current licensing business model has worked well and a move away from that model could end up killing the ‘golden goose’ if it means competing directly with its existing customers.
