Arm Dives into AI Chip Sector, Foresees Production by 2025

SoftBank Group's subsidiary Arm is gearing up to enter the AI chip market, with plans to roll out its own artificial intelligence chips by next year. This move comes amidst an escalating competition for dominance in the AI chip sector, as reported by Nikkei Asia.

The U.K.-based chip designer, in which SoftBank holds a 90% stake, will establish a dedicated AI chip unit aimed at producing a prototype by the spring of 2025, revealed the report on Sunday.

Discussions are underway between SoftBank and contract manufacturers, including Taiwan's TSMC, to facilitate the production of these AI chips. Mass production is scheduled to commence in the fall of 2025.

Arm, renowned for designing the foundational architecture on which chips are built, licenses its designs to companies such as Qualcomm and Nvidia, earning royalty fees on each sale they make.

The company boasts that 99% of premium smartphones rely on Arm technology.

The report indicates that Arm will shoulder the initial development costs of the AI chips, which could climb to "hundreds of billions of yen."

Once a mass-production system is established, there's potential for Arm's AI chip business to be spun off and placed under SoftBank's control.

Arm's shares have experienced a robust surge, soaring nearly 45% since the beginning of the year, with a market capitalization exceeding $113 billion, as per LSEG data.

SoftBank acquired Arm in 2016 for $32 billion and subsequently listed it on the Nasdaq last year.

Source: Sheila Chiang / CNBC