Eyeing to hike prices, Arm considers developing its own chips

Technology supplier to chip firms Arm Holdings is developing a long-term strategy to hike prices by as much as 300%. It has also discussed designing its own chips in a move to compete with its biggest customers in the semiconductor industry. For decades, the British firm kept a low profile, while licensing the intellectual property that Apple, Qualcomm, Microsoft and others use to design their chips. It charged a small royalty for each chip produced with Arm technology.

Arm has remained small compared with its customers, in spite of its key role in the rise of smartphones and energy-efficient data center chips. It recorded $3.23 billion in revenue for fiscal-year 2024. In its most recent fiscal year, Apple's revenue from hardware products, which are all powered by Arm-based chips, was more than 90 times larger.

Shift from its previous stand

Masayoshi Son, CEO of SoftBank Group, which owns 90% of Arm, and Arm CEO Rene Haas, are determined to change that, according to plans revealed in a trial last month in which Arm aimed unsuccessfully to secure higher royalty rates from Qualcomm.

The details of Arm's ambitions, which were described in court testimony and documents that remain under seal, have not been previously reported.

According to sealed executive testimony, known in its early stages as the "Picasso" project, Arm's plans, which date back to at least 2019, aim for a roughly $1 billion increase in annual smartphone revenue over about 10 years.

The plans Arm executives discussed included potentially inching closer to making a complete chip design of Arm's own, according to testimony and documents at trial. Arm sells chip-design blueprints, but most of its customers still spend months completing the chip design.