ARM Developing In-House Chip to Attract New Customers Ahead of IPO, According to Reports

According to a report by the Financial Times, ARM is developing its own chip to showcase the capabilities of its products. The company's newly formed "solutions engineering" team, led by former Qualcomm executive and Snapdragon designer Kevork Kechichian, is reportedly tasked with producing the semiconductor. The project is said to be part of ARM's efforts to attract new customers ahead of its highly anticipated initial public offering (IPO) later this year.

ARM began working on the prototype about six months ago, as reported by the Times. Multiple industry executives who spoke to the outlet revealed that the resulting design is "more advanced" than any semiconductor produced in the past. The fact that numerous sources outside of ARM confirmed the in-house chip project suggests that the prototype is something of an open secret within the chip industry.

ARM declined to comment on the report. According to the Times, the company does not plan to sell or license the design of the prototype to other companies. This aligns with ARM's business model, which is built around licensing its architecture to other firms. More than 500 companies, including Apple, MediaTek, and Qualcomm, employ ARM-designed components in their semiconductors.

While ARM dominates the smartphone and tablet markets, there are areas where it could make inroads. With PCs, for instance, ARM components are rare outside of recent Mac computers. As noted by the Times, the company warned investors last week of a "significant concentration" risk to its business. In 2022, ARM's top 20 customers accounted for 86 percent of its revenues. "The loss of a small number of key customers could significantly impact the group's growth," the company told analysts.

In addition to attracting new customers and improving its business model, the project could also benefit consumers. ARM's solutions engineering team is reportedly working on improving the performance and security of the company's designs, which could have a positive impact on the devices used daily.