ARM, a leader in the field of semiconductor silicon IP, is considering a 300% hike in chip licensing prices and making its own chips to increase its revenue. The company has set a target of an additional $1 billion in annual revenue from smartphone processors in a decade. Recently, a major legal dispute between ARM and Qualcomm also made headlines.
ARM has planned a big move to maintain its position in the field of chip design and technical development. The company, a leader in semiconductor technology, is now preparing to increase its licensing fees by up to 300%. Along with this, ARM is also considering the possibilities of making its own chips.
Revenue boost plan: In 2019, SoftBank founder Masayoshi Son had prepared a 10-year plan for ARM. The plan aims to increase annual revenue from smartphone processors by $1 billion. According to ARM officials, to achieve this goal, there were discussions to increase the licensing prices of Armv9 architecture by 300% in 2019 itself.
Legal dispute: ARM and Qualcomm had a serious dispute over chip design licensing. In 2022, ARM sued Qualcomm accusing it of illegal transfer of rights to Nuvia’s Arm instruction set. The case reached the US court, in which Qualcomm won in December 2022.
New strategy: ARM CEO Rini Haas suggested to the company’s board of directors in 2022 that ARM should consider developing its own chips along with its traditional IP licensing model. However, he clarified that this was only a plan under consideration and has not been implemented.
Key customers and challenges: Big customers like Apple and Qualcomm, whose chip design technology is already mature, may not be affected by this price increase. Nevertheless, this move by ARM can add new dimensions to other competitors and the industry.
Technical Experts’ Opinion: ARM’s idea of making its own chips can bring a big change in the industry. This move can make the company self-reliant against companies like Qualcomm and Apple.
Market Reaction: Analysts believe that if ARM executes its plan correctly, it can take the company to new heights. However, its high pricing policy can affect small and medium customers.
