My dears, there is never a dull moment in the semiconductor sector.
According to media reports, the British chip designer ARM is entering into direct competition with its licensees. The company is currently poaching their employees and working on the development of complete CPUs for customers such as Facebook parent company Meta.
ARM clashes with licensees
According to reports from both the Financial Times and the Reuters news agency, ARM is currently changing its business model. Until now, the company has specialized in licensing the various versions of its ARM architecture to chip developers, who then develop their own products on this basis. In future, ARM intends to develop and market entire processors itself.
To date, ARM has licensed the intellectual property that forms the basis of ARM architectures, which companies such as Apple, Nvidia, Qualcomm and many other licensees use to develop their own CPUs. However, the company now wants to generate more profit and turnover and develop complete processors itself.
ARM poaches employees from Qualcomm & Co
According to sources close to the company, ARM is recruiting CPU specialists from the workforce of its own licensees. Among other things, ARM is said to be bringing Qualcomm employees on board, whereby the US chip manufacturer from San Diego is probably ARM's largest licensee. Among other things, they are to develop ARM-based CPUs for major customers such as Facebook parent company Meta, which intends to use them in its data centers.
As recently as December, ARM CEO Rene Haas claimed in court in the license dispute against Qualcomm that ARM does not build its own chips. However, according to Reuters, efforts to poach employees from ARM's own licensees to build their own chips had already been underway for weeks at that time.
The fact that Qualcomm & Co are now facing competition from ARM is likely to cause great unrest in the chip industry. ARM has been trying for years to diversify its sources of income and thus generate more money. Up to now, it has mainly been the large licensees such as Apple that have earned large sums of money with chips based on ARM's architectures. The extent to which ARM can now compete with them without risking cooperation with the licensees remains to be seen.
Summary
ARM plans to develop complete CPUs instead of licensing only
Poaching employees from its own licensees for CPU development
Goal: Achieve higher profits by selling complete processors
Potential customers such as Meta for ARM-based CPUs in data centers
Contradiction to earlier statement by ARM boss in court
Possible tensions with previous licensees such as Qualcomm expected
Challenge: Balance between competition and cooperation with customers
