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ARM is reportedly building a chip to show off what its designs can do

The company does not plan to sell or license the prototype.

KAZUHIRO NOGI via Getty Images

ARM is reportedly building its own chip. According to the Financial Times, the company has tasked its newly formed “solutions engineering” team, led by former Qualcomm executive and Snapdragon designer Kevork Kechichian, with producing a semiconductor to showcase the capabilities of its products. ARM’s apparent goal with the project is to attract new customers ahead of its highly anticipated initial public offering later this year.

The Times reports the company began work on the prototype about six months ago. Multiple industry executives told the outlet the resulting design is “more advanced” than any semiconductor produced in the past. The fact numerous sources outside of ARM spoke to The Times about the in-house chip would suggest the prototype is something of an open secret within the chip industry.

ARM declined to comment. According to The Times, the firm does not plan to sell or license the design of the prototype to other companies. That’s easy to believe. It would be out of character for ARM to do otherwise. The company’s business model 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.

There are parts of the market where ARM could make inroads. With PCs, for instance, ARM components are rare outside of recent Mac computers. As The Times notes, the company last week warned investors of a “significant concentration” risk to its business. In 2022, ARM’s 20 most important 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 firm told analysts.

Separately, the project could be a good thing for consumers. According to The Times, ARM’s solutions engineering team is also working on improving the performance and security of the company’s designs. That work will likely trickle down to the devices you use daily.