Semiconductor Silicon Intelligence (IP) Longtou Arm revealed its latest financial report, but due to poor financial testing, Arm's share price fell about 8% in trading after Wednesday (30th). Executive Rene Haas emphasized that the company is accelerating R&D expenditures and considering providing a "complete end-to-end solution". The external solution is to plan to design a complete chip product by itself.
Arm architecture occupies a dominant position in the smartphone chip market, including Apple and Samsung, and NVIDIA's AI data center products also use Arm designs in large quantities. In order to gain more business opportunities, Arm began to explore upward integration and develop towards the final product direction.
Outside reading, Arm plans to increase investment in self-developed chips, which means changing from a long-term focus on providing IP to companies such as NVIDIA and Amazon. Haas pointed out that the finished chip is a "physical representation" of Arm's existing product "operator system" (CSS). "We are interested in choosing to increase investment, not just design, but actually manufacturing Chiplets (small chipsets) and even complete solutions," he said during a visit to Reuters.
Arm considers self-developed chips, and the business model may undergo a major change.The AI data center chip market is fierce, with the main leader being NVIDIA. Ammar and Microsoft also design their own chips, and competitors such as AMD are also aggressively competing for market share. Currently, the president of the Software Silver Group plans to make a comprehensive layout with Arm as the core, and develop it from semiconductors, data centers, and generative AI to robots, hoping to realize "artificial super intelligence", and Arm is the key core layout that occupies AI business machines.
At the same time, Silver has also cooperated with OpenAI, Oracle and the Algerian AI fund MGX to invest $50 billion in the "Stargate" project, and will build several data centers in the United States in the next four years. Haas notes that many Chiplets currently use Arm IP, so they are evaluating the feasibility of surpassing existing platforms.
Chiplet is a specialized, smaller chip module that the designer can use as a wood component to form a complete processor; and the "solution" includes the integration of software and hardware. Arm notes that even if investment chips, Chiplets and solutions are developed, these products may not be able to cause trouble if they are finally decided to suspend or reconcile projects.
Reuters believes that if the company chooses to build a complete chip, it will infringe on its profits and success is unguaranteed. The cost of optical silicon wafers for high-level AI chips may exceed US$500 million, and the cost of development is higher with the support of the required server hardware and software.
In order to expand the development team between Chiplet and finished chips, Arm is poaching from customer companies and competing with customer companies for market orders. However, Haas refused to disclose when this new policy would be converted into acquisition or profit, nor did it explain what specific products might be introduced in the plan. It only claims that Arm's goal covers Chiplets, physical chips, circuit boards and even complete systems, "all levels will be considered."
According to Arm's latest financial report, in the first quarter of the 2026 year-on-year (as of June 30, 2025), the closing increased by 11.8% to $1.05 billion, lower than the analyst's expectations of $1.06 billion; net profit fell 42% to $130 million and earnings per share of $0.12, and as of the adjusted earnings per share of $0.35, in line with LSEG expectations. Among them, the right toll collection was US$585 million, an increase of 25% year-on-year; the authorized collection was US$468 million, an decrease of 1% year-on-year.
However, in the financial testing section, Arm revealed his prudentness, which also highlights the uncertainty facing global manufacturers and suppliers under the influence of Trump's tax policy. Arm expects that the second quarter of the 2026 year will close between $1.01 billion and $1.11 billion (median $1.06 billion), lower than the market expectations of $1.07 billion; the EPS balance is between $0.29 and $0.37, lower than the market expectations of $0.35. Summit Insights analyst Kinngai Chan said Arm's financial reports and outlook were flat, lower than market expectations.
Arm working towards designing its own chips, CEO says Arm shares drop as outlook disappoints; company looks to invest to make own chips