Arm & SoftBank: AI Chip Production Set for Fall 2025!

Arm, a prominent global semiconductor IP provider under the umbrella of SoftBank Group, has announced the formation of a specialized division dedicated to AI chip development. The objective is to unveil prototype AI chips by spring 2025, with mass production slated to commence in the fall of 2025 through contracted manufacturers.

Arm will cover the initial developmental expenses of the AI chip, with anticipated total investments reaching billions of yen. Following the establishment of a large-scale production system by SoftBank Group, there are prospects for the spin-off and integration of Arm's AI chip business into SoftBank Group's divisions, given SoftBank's substantial 90% ownership stake in Arm.

Arm, renowned for its energy-efficient Arm architecture CPU cores and commanding over 90% of the global market share in mobile chip technology, was acquired by SoftBank in 2016 for $32 billion. In September 2023, SoftBank facilitated Arm's listing on the US stock market.

The financial report for the fourth quarter of the 2024 fiscal year (first quarter of the 2024 calendar year) released by Arm last week revealed a revenue surge of 47% year-on-year, amounting to $928 million. Adjusted operating profit for the quarter stood at $391 million, with projected revenue for the first quarter of the 2025 fiscal year estimated to range between $875 million and $925 million, and full-year revenue estimated between $3.8 billion and $4.1 billion.

According to Precedence Research based in Canada, the current market size of AI chips stands at $30 billion, projected to exceed $100 billion by 2029 and $200 billion by 2032. Although NVIDIA currently dominates the AI chip sector, there is a growing demand that remains unmet.

In light of the opportunities presented by the AI landscape, SoftBank Group's founder Masayoshi Son has identified the AI field as a strategic development direction and is actively seeking to raise $100 billion to establish an AI chip company, positioning it to compete effectively with NVIDIA.