SoftBank's shares surge amid Arm Holdings's AI chip plans
SoftBank Group's stock experienced a 1.89% increase, reaching 8,026 yen ahead of its earnings report. This surge was driven by reports of its subsidiary, Arm Holdings, planning to develop artificial intelligence (AI) powered chips for a 2025 launch. UK-based Arm Holdings is reportedly establishing a dedicated division for the development of these AI chips. The development process is set to commence promptly with an aim to unveil initial products by next year.
Arm Holdings's AI chip development timeline and costs
Arm Holdings is set to begin the development process in the coming weeks, with aspirations to have a prototype ready by spring 2025. Mass production of these AI chips is slated to start in the autumn of the same year. The initial development costs, estimated to reach hundreds of billions of yen, will be primarily covered by Arm Holdings. However, SoftBank Group is also expected to contribute to the funding.
Potential spin-off and manufacturing partnerships for AI chips
Once the mass-production infrastructure is ready, there are prospects for the AI chip business to be spun off and placed under the umbrella of SoftBank Group. Negotiations are reportedly underway with Taiwan Semiconductor Manufacturing Corp (TSMC) and other potential manufacturing partners to secure production capacity. Arm Holdings has been diversifying its portfolio by entering the data-center market, driven by a surge in demand for AI computing.
