NewsArm's Mysterious Chip: A Strategic Move for Revenue Boost Before IPO?

Arm’s Mysterious Chip: A Strategic Move for Revenue Boost Before IPO?

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 As of now, it is unknown what is the reason of their actions. It could be to show abilities to IP licensees, to compete against its customers, by implementing the business model of fabless semiconductors or even explore methods to increase revenue potential prior to their IPO later in the year.
This industry of semiconductors is a fiercely competitive one, with a myriad of companies competing to gain market shares. Some of the top companies based on revenue and market capitalization are:
  • Intel Corporation,
  • Samsung Electronics Co. Ltd,
  • Taiwan Semiconductor Manufacturing Company Limited (TSMC),
  • SK Hynix Inc and Qualcomm Incorporated have been listed as contributing,
  • Texas Instruments Inc and Micron Technology Inc are also listed on the list,
  • along with Advanced Micro Devices Inc (AMD).
    Be aware that rankings can change from every year, and companies might specialize in certain areas, like microprocessors and memory chips While others offer more extensive products and services.

    Arm is believed to have gathered the “solutions engineering” group under Kevork Kechichian of NXP and Qualcomm fame to develop their own chip.

    Arm’s costs indicate that they intend to make money from this chip, rather than using it only as an illustration tool.

    Arm’s model of business for licensing would fall apart when they tried to directly compete with customers by selling chips on their own.

    Recently, it was suggested that Arm might change its business model so that it charges OEMs that create end-user products for free licenses and also charge chip companies.

    SoftBank the owner of Arm has a debt of around $170 billion, and is eager to get as much capital feasible from their IPO.

    Arm is an British firm that specializes in software and semiconductor design company that specializes in the creation of Intellectual Property (IP) for manufacturing chips for a variety of devices like smartphones, IoT devices, servers and smart home devices. Their designs are available everywhere, from tablets and smartphones to smart home appliances and automotive systems and many more.

    Arm’s business model is based on the licensing of its intellectual properties (IP) in semiconductor makers and device makers, rather than producing its own chips, which allows Arm to concentrate its efforts on developing innovative technology while its licensees manage the production as well as distribution for their own.

    Arm was initially founded under the name of Advanced RISC Machines Ltd in 1990, before changing its name the name to Arm Holdings over time. SoftBank Group Corp acquired Arm in 2016 and is now considering Arm as an element of their conglomerate portfolio.

Michal Pukala
Electronics and Telecommunications engineer with Electro-energetics Master degree graduation. Lightning designer experienced engineer. Currently working in IT industry.