SoftBank Group was up 1.89 percent at 8,026 yen ahead of its earnings report due after the closing bell, AFP reported. The stock moved after reports that its chips subsidiary Arm Holdings is gearing up to launch artificial intelligence powered chips by 2025.
As per a report by Nikkei Asia, UK-based Arm is developing AI-powered chips which it is targetting a 2025 launch, Reuters said. The company is poised to establish a dedicated division for the development of AI chips and aims to unveil its initial products by 2025, it added.
Prototype Development and Mass Production Plans
Arm Holdings plans to commence the development process promptly, with aspirations to have a prototype ready by spring 2025, as per the report. Mass production of these AI chips is slated to begin in the autumn of the same year, with manufacturing duties entrusted to contract manufacturers.
Initial development costs, estimated to reach hundreds of billions of yen, will be primarily covered by Arm Holdings. SoftBank Group is expected to contribute to the funding as well, as per the report.
The Nikkei report further suggests that once the mass-production infrastructure is established, 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, SoftBank Group, and TSMC did not respond to queries, the report said. Livemint could not independently verify the report.
Expansion and Market Performance
Arm Holdings, known for licensing its chip designs and generating revenue through royalties, has been diversifying its portfolio by entering the data-centre market. The surge in demand for AI computing has been a key driver behind this expansion, as per the report.
The anticipation surrounding Arm’s potential in the AI computing domain has significantly boosted its share price since its initial public offering last September. The company’s market value now surpasses $100 billion.
SoftBank Group is expected to report a downturn in its financial performance when it releases its earnings report on Monday. Investors are keenly awaiting insights into the company’s new growth investments.
(With inputs from Reuters and AFP)
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Published: 13 May 2024, 10:26 AM IST