Arm Plans 300% Price Hike and Explores Entering Chip Manufacturing

The SoftBank-owned chip designer aims to boost revenue by increasing royalties and potentially competing directly with its customers by producing its own chips.

• Arm's 'Picasso' initiative, launched in 2019, seeks to increase annual smartphone revenue by $1 billion over 10 years, partly through raising royalty rates for its Armv9 architecture by up to 300%.
• The company is considering a strategic shift to manufacturing its own chips or chiplets, which would position it as a direct competitor to current customers like Qualcomm and MediaTek.
• Arm CEO Rene Haas has expressed confidence in the company's ability to compete with its customers, though this move has raised concerns among industry analysts regarding its impact on customer relationships.
• Trial documents reveal that Arm's plans to expand beyond licensing include discussions about acquiring Ampere Computing, a chip designer focused on the server market, to accelerate its growth.
• Arm's revenue for fiscal 2024 was $3.23 billion, significantly smaller than that of its major customers, prompting the company to pursue these aggressive strategies to expand its market presence.

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