Arm Reportedly Secures Meta As Client For Its First SoC

Arm, the company that provides the widely used Cortex CPU architecture and Mali/Immortalis GPU designs, is about to make major changes to its business model. The firm was not happy to see others growing rapidly using its technology without that being reflected in its profits. So, Arm is going to launch its own SoC (System on a Chip) on the market, with Meta being the first big customer.

In mid-January, Reuters revealed the changes that Arm was considering for its business model. Its main goal was to increase revenue by taking advantage of the huge growth of firms that license its CPU designs. One of the measures would be to increase licensing costs by up to 300% for “raw” CPU designs. This move would affect companies that use vanilla Arm’s CPU cores without modifications. Companies like Qualcomm and Apple use Arm technology in its SoCs, but customized.

Arm could be ready to launch its first SoCwith Meta as first client

Another possibility on the table was the design of its own SoC. Now, a report from the Financial Times claims that the American firm has already secured a big name among the first customers for its SoC. This is Meta, the company focused on social media and artificial intelligence. The news caused a 5% increase in Arm shares.

Arm’s SoC would be a CPU designed for servers and large data centers. The company would also permit customization to tailor it to the specific requirements of each client. Arm will use third-party factories to manufacture the SoC, although it is not yet known which one will be chosen. TSMC, the Taiwanese firm, is among the main candidates.

Arm’s classic business model based on licensing technology has not allowed it to grow at the pace of its clients. Other companies have taken advantage of the AI ​​boom to reach the top, such as NVIDIA. However, this has not been reflected in Arm’s profits. It seems that the real business is to participate directly as a key hardware supplier.

The SoC could arrive starting summer

According to the report, Arm will present its SoC at the beginning of the summer. Arm’s parent, SoftBank, also wants to buy chipmaker Ampere. The deal, estimated at around $6.5 billion, is said to be key to Arm’s new strategy.