Arm’s entry into chip sales represents a major strategic pivot as the company targets rapid growth driven by AI silicon.
Arm Holdings Plc is making its biggest strategic shift yet, moving beyond chip design licensing to manufacture its own processors — a transition that could redefine its role in the global semiconductor industry.
The company announced plans to launch its first in-house processor, an artificial general intelligence-focused chip dubbed the AGI CPU. The move marks Arm’s entry into direct chipmaking, a departure from its long-standing business model of supplying intellectual property to other semiconductor companies.
The first major customer for the processor will be Meta Platforms Inc., which plans to deploy the chip for advanced computing workloads. Unveiled at a company event in San Francisco, the processor is expected to feature up to 136 cores and operate at roughly 300 watts of power.
Production will be handled by Taiwan Semiconductor Manufacturing Co. (TSMC), underscoring Arm’s reliance on leading-edge manufacturing partners even as it expands into selling finished silicon products.
The initiative represents a major evolution for Arm, historically known for licensing processor architectures rather than competing directly with its customers. Executives outlined ambitious financial expectations, projecting that revenue from the new chip division could surpass its traditional intellectual property business within five years.
Arm forecasts overall annual revenue reaching approximately $25 billion over that period — about five times its current level — with the licensing segment still growing to around $10 billion while the new chip business becomes the company’s primary growth engine.
