In fact, ARM started from a very low point. When it was first established, Apple was its major shareholder. At that time, it managed to secure a deal with the leading chip manufacturer, Texas Instruments (TI), which gradually allowed it to enter the chip design field..
Although it seems that its chip shipment volume is extremely large, ARM’s annual chip shipment volume is around 30 billion units. However, its revenue is very low. In 2024, its revenue was only about 3 billion USD, with a net profit of only 300 million USD. After going public, its market value hovered around several hundred billion USD. Therefore, its market value is not comparable to the thousands of billions or even trillions of dollars of companies like ASML, Intel, Qualcomm, and TSMC..
Its revenue mainly comes from intellectual property licensing, where it can earn about 1% of the chip sales price. In other words, for a chip priced at one dollar, it only receives 1 cent. In terms of both technical and economic value, compared to major chip design companies like Qualcomm, Broadcom, and NVIDIA, its technical value is not as high as one might expect.
On another note, its annual chip shipment volume has reached 40 billion units, which accounts for over 95% of the global computing chip market share. Moreover, ARM’s ecosystem is already very mature, so in this context, its decision to engage in chip design services will not conflict with companies like MediaTek, Qualcomm, Broadcom, and NVIDIA..
Ultimately, the purpose of ARM’s foray into chip design is simply to increase its profits.