Qualcomm has officially implemented several updates to its leading chips for the latest generation of Arm Holdings’ computing architecture, according to reports from sources familiar with the situation. This integrates features that will boost its AI performance.
These changes could significantly increase Arm’s revenues and enable Qualcomm’s chips to compete more effectively with its rivals, such as MediaTek and Apple.
The semiconductor manufacturer’s decision has clarified earlier controversies raised by individuals regarding whether it will continue to work with Arm technology after a tough legal dispute between the two in 2024.
Qualcomm participates in the growing trend of utilizing Arm’s v9 technology
Following Qualcomm’s announcement, Arm’s shares substantially surged by 5% during regular trading hours. This left several analysts anticipating that the semiconductor manufacturer will increase Arm’s earnings. Notably, this company charges higher prices for its latest technology.
In the meantime, the chipmaker, based in San Diego, California, introduced a new generation of chips for PCs and mobile phones last week.
According to information from two sources with knowledge of the situation who wished to remain anonymous, as the talks were confidential, these chips will use Arm’s computing architecture, the ninth version called “v9.” This version includes several enhancements to improve how chips handle tasks such as chatbots and image generation.
The main drive behind Qualcomm’s decision is to solidify its position as a leader in the tech ecosystem. The company initiated this focus after realizing that its rival, MediaTek, which sometimes outperforms it, utilizes Arm’s v9 technology. Additionally, most analysts speculated that Apple applied this architecture in its operations.
Concerning its widespread adoption in the tech industry, experts have concluded that this technology, referred to as an instruction set architecture, is essential for determining what kinds of programs can run on a central processing unit.
Qualcomm did not disclose details regarding Arm’s technology used in its latest chips, but highlighted that it chose the instructions that could benefit its customers. The company also pointed out that the advantage of having its own CPU design team is that it can select the instructions that offer value.
Jay Goldberg refers to Qualcomm’s decision as a big development
Arm is competing against newer firms like RISC-V, which offers a free open chip standard. However, this technology is much younger than Arm’s, and fewer software developers are utilizing it.
Regarding Qualcomm’s decision, the company also had the option to stick with an earlier version of Arm’s technology, as it did for chips released last year.
Still, it is hard to say by how much Qualcomm’s decision could grow Arm’s revenue. This is because Qualcomm licenses the computing architecture of Arm but largely designs its chips independently, rather than simply purchasing parts from Arm, according to Jay Goldberg, a senior research analyst for semiconductors and electronics at Seaport Research Partners. Goldberg also mentioned that this was a significant development, as the legal fight was still ongoing.
He made these remarks regarding a less than a year ago conflict whereby Arm had threatened to revoke an important license held by Qualcomm, only to pull back from that threat.
“This is great news for Arm,” Goldberg said of Qualcomm’s reported efforts, pointing out that “these were companies at war, not friends. Qualcomm could have gone in a totally different direction.”
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