Arm wants a bigger slice of the chip business

https://www.economist.com/business/2026/02/12/arm-wants-a-bigger-slice-of-the-chip-business

by andsoitis • 5 months ago

151 101 5 months ago

alephnerd5• 5 months ago

I'm not sure I buy Arm's argument. It is hard to describe the degree to which policymakers in China [0][1], India [2][3][4], and South Korea [5] are all heavily promoting RISC-V in order to reduce vendor dependency as well as build their own competitive and domestic design ecosystems.

Additionally, a significant portion of Arm's China, US, and India engineering and product leadership has left to work on RISC-V startups and companies now.

That said, I can see Arm being leveraged by other Softbank owned companies like Ampere (which they already do) and Graphcore, with an eventual merger of all 3 into some form of a mega-corp due to operational overlaps and efficiencies, but this would be defensive in nature given the degree to which the industry has aligned with funding a RISC-V ecosystem and how RISC-V's governance and leadership consists of major players and leaders in the chip design space.

---

Edit: Can't reply

It is also a bad look when they sue Qualcomm for selling chips in a way that Arm does not like.

That's why Qualcomm is also betting on RISC-V as well after acquiring Ventana [6] and is participating in India's DeepTech initiative [7], which has been targeting RISC-V startups as well as Renesas [8] in Japan+India taping out a 3nm RISC-V processor for automotive and IoT usecases. And also why FuriosaAI in SK has been working on RISC-V, as well as the multitude of fabless players in China.

It's the same thing that happened with IBM POWER vs x86 decades ago with an added sovereignty component.

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Edit 2: After thinking some more, I think a case could be made for Arm to survive but not thrive in the same manner as Minitel continued to kick around for so long due to France's stress on technological sovereignty. Long term, I think RISC-V will eat a large portion of Arm's commodity and embedded computing market share, but Arm (and moreso Softbank) is attempting to position itself as critical to British [9], Malaysian [10] (they remain a major semiconductor hub), and even Indian [11] attempts at design sovereignty.

I can see a British-Japanese alignment around eventually merging Softbank properties like Arm, Graphcore, Ampere, and Rapidus into a British-Japanese version of Intel such that Graphcore+Ampere leverage Arm's ISA for HPC and Embedded/Telecom usecases respectively and Rapidus becomes their foundry.

Additionally, I can see the Japanese government pushing it's players to heavily leverage Arm as well - especially given that all the major players in Japan already cooperate, have an ownership stake in, or are partially owned by Softbank.

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[0] https://www.digitimes.com/news/a20260213PD208/arm-risc-v-com...

[1] https://www.cas.cn/cm/202601/t20260126_5097208.shtml

[2] https://www.digitimes.com/news/a20260216VL205.html

[3] https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2224839&...

[4] https://www.pib.gov.in/PressReleasePage.aspx?PRID=1820621&re...

[5] https://m.blog.naver.com/nanambook/223316051806

[6] https://www.qualcomm.com/news/releases/2025/12/qualcomm-acqu...

[7] https://idtalliance.org/

[8] https://www.digitimes.com/news/a20250923VL201/renesas-3nm-re...

[9] https://www.gov.uk/government/publications/building-a-sovere...

[10] https://newsroom.arm.com/blog/arm-malaysia-silicon-vision

[11] https://www.digitimes.com/news/a20250918VL202/arm-design-chi...

3eb7988a1663• 5 months ago

It is also a bad look when they sue Qualcomm for selling chips in a way that Arm does not like.

wmf2• 5 months ago

Qualcomm was trying to cheat Arm out of license fees that Nuvia agreed to.

echelon• 5 months ago

Edit: Can't reply

Orthogonal question for Dang or someone who knows -

Do downvotes, account flaggings, and/or high posting volumes trigger this? I run into it frequently whenever I get downvotes. I almost never used to get this before 2022 or so.

thisislife22• 5 months ago

I have experienced this issue some time too - I think if you post some "controversial" comment (judged by many quick upvotes and downvotes) it triggers a "cooling down" period before you can post a reply to your immediate child comments in the thread (or it could be mod-triggered). This ensures you don't dominate the thread, and allows a conversation with other participants to develop. Based on how others react to the comments, I assume it also gives the mods a better idea if they need to intervene. I found it a minor annoyance at first, but have learnt to appreciate it - thoughtful comments (with careful moderation) from a diverse group of people is what makes a community like this valuable.

djfergus• 5 months ago

https://archive.is/wrKvv

Nevermark2• 5 months ago

I am curious how AMD sees themselves staying relevant in the value chain as compute is increasingly about cpu cores working with npu cores.

Not all ARM use cases need that, but it would be a huge mistake to not develop integrated options.

And also an opportunity to make adjustments to their business model.

wmf2• 5 months ago

AMD has CPU, GPU, NPU, FPGA, NIC, DPU... They seem well positioned. The Arm ecosystem has everything you could want but Arm themselves are taking some time to create their in-house CPU and TPU.

Nevermark2• 5 months ago

That's good news. A system for customers (and themselves) to conveniently tightly mix and match all those computing modes is a great competitive/value move.

hulitu• 5 months ago

ARM is an incompatible pile of mess. On an (X86) PC you can tranfer your disk, as it is, to a new X86 architecture and it will run.

On ARM, every processor has its own bootloader, blobs needed for initialisation. Even the systems have different architecture. In the end, you need a special software setup, which is not supported more than a few years. See phones, Raspberry PIs and derivatives, Chromebooks.

ajxs2• 5 months ago

On an (X86) PC you can tranfer your disk, as it is, to a new X86 architecture and it will run.

This is because of a supporting set of standards (BIOS/UEFI/ACPI) that are well-supported on x86 systems, but technically independent of the x86 ISA. BIOS, and the general compatibility you're talking about, is a historical artefact of the IBM PC being so dominant in the market that other companies created compatible computers. UEFI and ACPI actually exist in the ARM ecosystem now. If ARM continues to grow outside of mobile devices, you could eventually see the kind of broad compatibility you're talking about. It's not super likely though. All signs point to the consumer computing ecosystem becoming more closed, rather than more open.

Imustaskforhelp2• 5 months ago

I think this comment finally explains to me why we find issues with rooting/flashing other isos on Android phones each having seperate methods which I always used to wonder. So thanks!

Quick question but How does Risc-V compare to this?

pm215• 5 months ago

This is a result of the market and its demands, not something specific to the architecture. In desktop and server, customers demand that they can buy a new machine and install a previously released stable OS on it. That means the vendors will implement the necessary standards and cross compatibility to make that happen. In the embedded market, customers don't demand that, and so vendors have no incentive to provide it. Instead what you get is that the specific combined hardware-and-software product works and is shipped with whatever expedient set of hacks gets it out of the door. Having a new cool hardware feature that works somehow or other is more important for sales than whether that driver is upstream or there's a way to describe it in ACPI.

Where Arm is in markets that do demand compatibility (i.e. server) the standards like UEFI and ACPI are there and work. Where it's in markets like embedded, you still see the embedded profusion of different random stuff. Where other architectures are in the embedded market, you also see a wide range of different not very compatible hardware: look at riscv for an example.

intrasight3• 5 months ago

Yet Arm’s current model captures only a sliver of the value it creates.

No, they capture exactly the value they create.

As a long time (40 years) subscriber to The Economist, I expect better of them.

cyode• 5 months ago

Do you really think it’s equal or are you contesting the value creation/capture dichotomy writ large?

intrasight3• 5 months ago

I think both

Analogous to discussion 3 days ago

https://news.ycombinator.com/item?id=46994869#46995258

We're fast approaching 1 trillion Arm CPUs manufactured - because it was a good design for a good price.

No doubt unprecedented for something so complex to be produced in such volume. I predict that nothing else will ever achieve such scale.

nerdsniper• 5 months ago

This feels like a religious belief. Somehow everyone captures exactly the value they create - no more, and no less. Amazing how perfect every transaction must be to ensure this is always true.

concinds• 5 months ago

"Capturing the value you create" is a euphemistic way to describe pushing producer surplus towards 100% and consumer surplus to 0%, your ability to pull it off depends on your monopoly power, and it would be more honestly described as "value extraction" than as "capturing".

I think in this case semantics matter.

amelius2• 5 months ago

They must also believe that stock prices represent actual value. I guess they use a very limited definition of the word "value".

dash2• 5 months ago

Actually, in most economic models of markets, the producer does not capture 100% of the value it creates. The exception would be a pure monopoly where I can do pure price discrimination and charge everybody exactly as much as they would pay. That is pretty rare for obvious reasons. So I don't know why GP expects this to be true of ARM.

jillesvangurp• 5 months ago

The value of ARM is that it's a cheap commodity that you can license instead of reinvent. That's why there is a range of chip makers that now produce ARM chips instead of or in addition to their own designs. Other chip designs are available. Risc V is getting some traction. It will take a long time for that to catch up with ARM but of course if ARM raises their pricing that might provide an incentive to speed up development.

ggm2• 5 months ago

Porque no los dos?

Keep on doing IPR focussed design.

Grow deeper roots into a foundry, work on integration of the tech into FPGA and big chip/platter stuff for AI.

If AI tanks, the work will find a value point. We all want more memory and more execution cycles per clock tick be they on one ALU or many.

Lots of work to come in optical related areas. ARM has green fields to dig, beyond the instruction set.

dingdongditchme• 5 months ago

What do you mean by "IPR focussed design"? IPR = Intellectial Property Rights? So they should keep making designs but not compete with their customers?

ggm2• 5 months ago

Do both. It's not like other companies don't do the same, Microsoft sell surface as well as Windows. Samsung sell tech to Apple and compete with Apple.

jasoneckert• 5 months ago

ARM's failed lawsuit with Qualcomm revealed these same ambitions, albeit in a much more negative light: https://news.ycombinator.com/item?id=42475228

After following that drama, it's difficult to see ARM as anything but a greedy profiteer.

wyldfire2• 5 months ago

Maybe they're greedy or maybe they see the long game is that their architecture licensing business is in serious jeopardy from RISCV. So, if you can't beat em, join em.

Maybe they'll eventually make their own RV core designs too.

nxobject• 5 months ago

Maybe they'll eventually make their own RV core designs too.

I am not a deeply technical embedded person, but I actually don't think that would be the death of ARM: my understanding is that they develop a lot of SoC-level interconnect/fabric standards and IP as well. After all, you have to do a lot of work to integrate your ARM cores into an actual platform...

LeFantome2• 5 months ago

The problem for ARM is that there are a dozen RISC-V companies implementing their business model.

You license ARM cores because you want a “custom” chip but do not want to start from scratch. You especially do not want to have to bootstrap a software ecosystem. When ARM had no competition, it is just a question of which ARM core you want.

Now, you can get the same thing from any RISC-V design house. Which means having real choice over the features you want. If ARM is just one of those RISC-V shops, how does ARM compete? By being the best? Not likely.

And, in the past, you could not totally outgrow ARM as they own the ISA. The Qualcomm lawsuit was an attempt to maintain tight control over this. With RISC-V, you can pack up and move your whole ecosystem elsewhere including taking it entirely in-house. This includes the ISA to an extent since anybody can add extensions.

Today, we are seeing RISC-V succeed where this flexibility matters most: in microcontrollers and in AI.

But as performance equalizes, volumes go up and costs come down, the use cases where ARM makes more sense dwindle.

That makes backwards compatibility the last real reason to use ARM. But does this matter on mobile where devices download the apps that match their arch? Not really. Does it matter in most embedded cases? Not really. Does it even matter in the server? More, but even there not as much as it used to. Does it matter for anything mostly GPU or NPU driven? No. So that leaves desktop and laptop. And, outside of Apple, ARM has not really built up anything to stay compatible with. RISC-V may have time to grow into that niche before being blocked.

We are going to exit 2026 with RISC-V chips that are fast enough. How fast will the costs come down? Perhaps a year or two?

What markets is ARM well positioned to continue its dominance in?

onion2k• 5 months ago

it's difficult to see ARM as anything but a greedy profiteer

Welcome to Capitalism. It's not perfect but it's the best we've got.

lysace3• 5 months ago

it's difficult to see ARM as anything but a greedy profiteer.

Keep in mind that Apple is the other party in this interaction. Pot, Kettle, Black, etc.

amelius2• 5 months ago

Yes, what would you call the 30% that developers have to pay?

TSMC should charge Apple a 30% fee to be in their FabStore.

kernal2• 5 months ago

If ARM wanted a bigger cut then they should have been fabricating their designs years ago instead of licensing their IP. They would have owned the Android SoC market.

cududa• 5 months ago

Good. It’s always insane to me that they get 1% of the iPhone CPU cost of ~$68 or something there around.

There was a lawsuit in 2020 or 2021 where some evidence was unsealed showing ARM gets 1% of the CPU cost. I can’t recall how that CPU cost was calculated - but I believe that was a part of their deal through the early 30’s. That’s less than a dollar per iPhone.

faragon• 5 months ago

It's "fair": ARM takes 1% of the iPhone CPU, i.e., less than 0.1% of the total phone price, while Apple takes 30% of the apps in the iStore

hollerith• 5 months ago

--and about 50% of the total price of an iPhone.

thisislife22• 5 months ago

Spot on! The 1% is indeed absolutely reasonable when you consider the 30% or so Apple tries to leech of from both developers and its user base.

lysace3• 5 months ago

Not that I wouldn't want Apple to pay ARM more, but,

a) Apple is getting really good at switching CPU architectures when needed.

b) Don't they already have a forever licence to the ARM ISA (since the 90s/Newton) as well as a substantial in-house design team? I guess the renegotiations are about future/roadmapped ARM archictural enhancements.

It would be sad if there was a substantial fork of the arm64 ISA.

throwaway72361• 5 months ago

Apple doesn't have a "forever" license. They have an architectural license, similar to a small number of other Arm architectural licensees, with certain contractual payment terms, lengths, restrictions, and timelines for extension, etc. The idea that Apple has a special, perpetual free license to Arm ISA/technology as a result of their involvement in its founding is a myth.

OrvalWintermute2• 5 months ago

RISC-V could completely eat ARM for lunch if they try to jack up fees under the guise of "value extraction", and not through true value creation.

In 2 years from this date, I fully expect the safety critical RISC-V chips like the forthcoming High Performance Spaceflight Computer (HPSC) from Microchip, Inc.[0], and derivatives [1] [2] leveraging SiFive IP[3], and other RISC-V competitors [4] to take a dominant position in Space, Aerospace, Aviation, and potentially other less cost-sensitive industries where RTOS dominate.

This raises a few questions in my mind:

Could that extend to vehicles and other use-cases?

Will we see more derivatives with even higher performance beyond the already announced PolarFire2 designed specifically for terrestrial use?

I don't know how sensitive their overall BOMs are to high priced reliable chips designed for fault tolerance...

I don't know how fast the quality of the mass market chinese RISC-V chips will ascend the perceived quality gap, and expand offerings into newer profiles [5]

Where will the toolchain for RISC-V be on a specific chip basis?

Is Nvidia likely to expand their usage of RISC-V?

[0] https://www.microchip.com/en-us/products/microprocessors/64-...

[1] https://www.microchip.com/en-us/products/microprocessors/64-...

[2] https://www.microchip.com/en-us/products/microprocessors/64-...

[3] https://www.sifive.com/

[4] https://www.gaisler.com/products/gr765

[5] https://docs.riscv.org/reference/profiles/rva23/_attachments...

alephnerd5• 5 months ago

In 2 years from this date, I fully expect the safety critical RISC-V chips like the forthcoming High Performance Spaceflight Computer (HPSC) from Microchip, Inc.[0], and derivatives [1] [2] leveraging SiFive IP[3], and other RISC-V competitors [4] to take a dominant position in Space, Aerospace, Aviation, and potentially other less cost-sensitive industries where RTOS dominate

They already are in India [0][1], but SiFive helped build a portion of the ecosystem in India as well [2].

I'm sure there are similar applications in China but I'd need help pointing to a specific initiative. I know Tenstorrent is hitching their wagon to China especially after poaching Arm China leadership.

Could that extend to vehicles and other use-cases

They already are in India [3][4][8] - this is something the US and Indian governments as well as American and Indian VCs and corporations are collaborating on together. One such collaboration has already IPOed [5], seen combat, and begun helping develop capacity within America [6]. And another has recently announced a mega-raise with General Catalyst [7]. RISC-V design is on the roadmap as well in this relationship.

[0] https://www.iitm.ac.in/happenings/press-releases-and-coverag...

[1] https://www.isro.gov.in/vikram3201.html

[2] https://www.sifive.com/blog/sifive-expands-presence-in-india...

[3] https://www.digitimes.com/news/a20260209VL216/risc-v-automot...

[4] https://www.mindgrovetech.in/s2401-secure-iot

[5] https://www.qualcommventures.com/insights/blog/ideaforge-fro...

[6] https://firstbreach.com/news/first-breach-signs-jv-with-idea...

[7] https://www.generalcatalyst.com/stories/our-investment-in-ra...

[8] https://incoresemi.com/

shash• 5 months ago

Hi, CEO of Mindgrove here!

Good to see that we're being noticed. But we all still need to deploy (in scale) to make anything worthwhile.

christkv• 5 months ago

Arm has two main incomes. Licensing the ISA of the processor (low value) and licensing pre designed cores (high value).

aurareturn4• 5 months ago

Arm's biggest customers are also their biggest competitors. Apple and Qualcomm use their ISA license instead of their Core architecture license. ISA license pays a much smaller royalty fee.

Now that Apple and Qualcomm both design their own custom cores, Arm's custom core license business is suffering. The only other company that license their custom cores for phones is Mediatek. Arm still has hyperscalers in Google, AWS, Microsoft, and Meta for server core licenses though. But that might not last as long since everyone wants to differentiate and design their own cores. Apple and Qualcomm are succeeding in designing better custom cores than original Arm cores.

So Arm's business model has to change if they want to survive.

Either they make ISA license fees much higher (risk losing customers to RISCV) or they make their own CPUs and compete against their own customers even more.

I enjoy analyzing chip companies and businesses. I've never invested in Arm's stock because their customers are also their competitors. Ultimately, the questions for Arm investors are:

1. Do you believe they can design better cores than Apple and Qualcomm (and other big tech)?

2. Do you think that the threat of companies moving to RISC-V is real if Arm raises ISA royalties?

RobotToaster• 5 months ago

Risc-v seems to be rapidly filling in their moat.

Very little software on android is written in assembly, and binary translation seems to be solved anyway.

aurareturn4• 5 months ago

Arguably, the LLM boom might be the best thing to happen to RISC-V. If software is cheap to produce, it'll be hardware cost that matter more. IE. Companies might say screw the royalty fees, we'll just ask an LLM to convert our software to run on RISC-V.

ffsm8• 5 months ago

I don't have any note-able industry insights to add, I just feel the urge to point out that

I've never invested in Arm's stock because their customers are also their competitors.

Also applies to Nvidia. And there as been a lot of controversy related to exactly that reason. The most note-able being EVGA just throwing in the towel and sunsetting their entire GPU department. (And that predates the current LLM / AI boom)

I guess it's a showcase of a company leveraging this relationship

aurareturn4• 5 months ago

For Nvidia and AMD, it's the same question.

Can Nvidia design a better AI chip than their customers? Can AMD design a better server CPU than their customers?

Nvidia is proving they can. Arm has already lost the performance and efficiency crown to Apple and will likely lose soon to Qualcomm, if not already.

I think the GPU business is also fundamentally different than CPUs. For CPUs, it's all about interoperability. The ISA is the same. You can swap out any RAM easily. You can run Windows, iOS, Android, Linux. The only thing you're differentiating on is performance, efficiency, and the chip size.

For GPUs, everything is custom. There are far more ways to differentiate. Nvidia can differentiate through ISA, CUDA, chip design, cooling design, packaging design, rack design, networking chips, etc. Nvidia is more about selling systems than a chip.

StopDisinfo9102• 5 months ago

To me, that seems like a misreading of the market.

Apple and Qualcomm don't sublicense so they are not really Arm competitors. Plus, ARM was always a convenient way to mutualise development costs without the risk of collusion. I am not sure it's changing.

You say people want to differentiate but Google constant failures to bring a state of the art offer with the Tensor shows that it's not that easy. Meanwhile Mediatek is competitive while remaining close to ARM design.

I don't think the market has changed that much on the high-end. The real question is how free will ARM be to export their future architectures. That's more where I see a risk.

That and the low-end being contested by Risk-V.

aurareturn4• 5 months ago

  Apple and Qualcomm don't sublicense so they are not really Arm competitors. Plus, ARM was always a convenient way to mutualise development costs without the risk of collusion. I am not sure it's changing.

Apple and Qualcomm absolutely are Arm competitors. Otherwise, Arm wouldn't have sued Qualcomm over the Nuvia deal.

Arm makes far more money licensing their cores than their ISAs. If their entire business was reduced to just licensing their ISAs because their cores can't compete against their customers' custom cores, then they will be at a highly disadvantaged position.

joker99• 5 months ago

Isn’t apple actually an early investor and co-owner of ARM?

kachapopopow• 5 months ago

There is also a funny effect that companies can buy part of arm to get a "discount" on ISA royalties since part of the profits will come back to them + the general profits of ARM.

dlenski2• 5 months ago

Either they make ISA license fees much higher (risk losing customers to RISCV)

If ARM goes down this path, it'll be a classic “innovator's dilemma” cycle leading to disruption.

ARM is clearly the superior incumbent technology, with a vast software base, billions of devices, extremely optimized designs, and huge amounts of engineering experience at the companies that use it; RISC-V is less capable on all counts.

And yet RISC-V is likely to eat ARM's lunch gradually—and then rapidly—over the next decade or so, due to being cheaper to build new cores on.

ksec• 5 months ago

1. Do you believe they can design better cores than Apple and Qualcomm (and other big tech)?

Define better. Because ARM is delivering better CPU Core and Value through their C1 and C2 without having its customer setting up its own R&D on CPU design. Not to mention the GPU and other IPs that comes with it.

But that might not last as long since everyone wants to differentiate and design their own cores.

That is easier said than done. Had that been the case, the largest Hyperscaler of all, Amazon would have had their own CPU core on Graviton. Designing CPU Core is one thing, making them and integrating them properly to suit their own workload is an entirely separate effort.

So Arm's business model has to change if they want to survive.

They can continue to do what they are doing today to survive perfectly fine. I assume you want change because you want them to grow.

Also, ARM's business model isn't just on Smartphone. There are billions of places if not trillions of places where ARM core exist.

fifticon• 5 months ago

traditionally, the chip goes on the shoulder, not the arm.

gzread3• 5 months ago

ARM almost made inroads on servers, then everyone switched back to x64. What happened?

Lucasoato• 5 months ago

I regularly use Graviton CPUs on AWS (even if Amazon pays the cheaper ARM license), why would people switch back from that? It's effectively better in terms of performance/price, I expect these improvements to slowly but steadily reach the on-premises world as well.

gzread3• 5 months ago

Yeah, but everything on AWS is already way more expensive than it should be, so the slight discount on ARM instances is a gimmick from Amazon to diversify their servers or something. Actual ARM servers aren't cheaper or better.

justincormack• 5 months ago

The latest figures sugegsted that about 50% of server shipments into the clouds now are Arm.

erelong• 5 months ago

Hopefully RISC-V pulls ahead in coming years and gets an even bigger "slice"

snvzz• 5 months ago

RISC-V is rapidly growing the strongest ecosystem.

NoiseBert69• 5 months ago

RISC-V is eating the "low power low performance"-niche alive right now. ARM-licensed microcontrollers (like STM32C0) cannot keep up with this price class. That's a huge business.

Have a look at WCH. If you are used to the ST-HAL style you get that stuff running within a hour. They stuff works will fully opensourced compilers.

bacchusracine• 5 months ago

Without Linux support, unlikely.

sylware• 5 months ago

ARM should drop its ISAs and move to 'licensing' RISC-V implementations.

IP-locked ISA is something nobody sane would want.

dingi• 5 months ago

Not with this compatibility mess. I would trust ARM for a server/pc system, the day I can boot standard Debian Aarch64 image on them. Until then x86 it is.

josemanuel• 5 months ago

https://www.minisforum.com/products/ms-r1

Boots with uefi

kd913• 5 months ago

ARM is a bloody financial hand grenade.

10% of the stock is floated.

90% of the stock is owned by Masa who used it for collateral for his 18 billion loan for Stargate. THat is against 33 banks who have a strong incentivise to dump in a margin call situation.

Their revenues are circular for the last 4 years, with 30% growth purely coming from Softbank shuffling their own money.

They are gonna be the canary in the coal mine for when the AI bubble implodes.

r4hamonrye• 5 months ago

ARM .iso for x86-64 architecture renders this within compiling microcode in mockbuild before porting kernel tarball.

Arm wants a bigger slice of the chip business

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