Arm wants to increase mobile chip prices

Arm Holdings is attracting attention with a move to increase its market share and revenue. The company is preparing to take a series of steps that may change the balance in the industry. However, it was stated that these plans may cost chip production expensively.

Arm wants to increase chip prices

Arm’s first goal will be to increase chip design licensing fees by up to 300 percent within the scope of the project called “Picasso”. This initiative, which specifically targets the new Armv9 architecture, is expected to generate annual revenue of $1 billion in the next decade.

Arm’s goals go far beyond increasing licensing fees. The company is considering designing and producing its own chips by making a radical change in its business model. This step could put it in competition with major customers such as Apple and Qualcomm, which use its own solutions.

Arm, which generated $3.23 billion in revenue in fiscal 2024; It generates very small revenues from its customers. For example, Apple’s revenue from Arm-based hardware is more than 90 times greater than Arm’s total earnings.

Arm CEO Rene Haas said that the company was uncomfortable being dependent on its largest customers. Internal conversations and previously leaked documents revealed that Arm has been carrying out these plans since 2019.

SoftBank Group, which owns 90 percent of Arm, supports these plans of the company. However, these changes also carry significant risks. License fees and direct competition with customers can sour long-standing relationships and drive customers to alternative chip designs.