- Arm moves closer to silicon manufacturing, risking strained ties with major partners
- Strategic hires reveal Arm’s deepening ambition to design complete chips independently
- Sinno’s Amazon track record signals Arm’s growing focus on artificial intelligence
Arm, long rumored to be considering building its own chips, is reportedly moving ahead with its “Picasso” project, potentially competing with major customers while also planning royalty hikes.
Long known for licensing its processor designs to customers rather than making its own chips, Arm has made some strategic hires, including engineers with backgrounds at major firms, such as Nicolas Dube from HPE and Steve Halter, who worked at Intel and Qualcomm.
The latest addition is Rami Sinno, a former vice president of engineering at AWS’s Annapurna Labs, where he directed the development of Amazon’s “Trainium” and “Inferentia” processors tailored for artificial intelligence workloads.
Investment and ambition
Sinno had earlier played a key role in Amazon’s effort to build chips that could undercut Nvidia’s dominance in AI computing, both on price and performance.
Arm’s latest moves suggest that the company is strengthening its ability to design complete chips and systems.
Its designs underpin nearly every smartphone on the market, and in recent years, it has also gained traction in servers once dominated by Intel and AMD.
As it edges closer to producing its own silicon, the market dynamics are set to change, and Arm is setting funds aside to achieve its goal.
In July 2025, Arm disclosed that it would allocate part of its profit toward building not only traditional chips but also chiplets.
These smaller, specialized components can be stitched together into larger systems, a strategy increasingly adopted across the industry.
CEO Rene Haas has described this as a natural extension of Arm’s design business, moving into areas where the company currently provides intellectual property but not finished hardware.
Until now, Arm’s income has depended heavily on the royalties it collects from chipmakers who integrate its designs into their products.
However, with data centers shifting toward Arm-based servers, the company appears to see an opportunity to sell more complete solutions.
Such a move could put it in direct competition with its largest customers, including Apple, Qualcomm, and Nvidia, all of which rely on Arm’s intellectual property.
According to industry experts, this carries strategic risks.
Arm could alienate companies that form the backbone of its business while attempting to challenge entrenched rivals in the server and AI markets.
The company’s attempt to raise royalty rates may also create another source of tension with partners.
While the hiring of Sinno and other experienced executives underscores Arm’s seriousness, the extent to which the company can transform itself from a design house into a chipmaker remains uncertain.
Via Reuters
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