Arm Bets on Chiplets to Rewrite the Future of Chips

UK-based designer, Arm moves into chipmaking as demand for Al and US industrial policy reshape market

23 Aug 2025

Arm is investing to develop its own chips, exploring both chiplets and complete processors, a major shift beyond its traditional IP-licensing model. Long the behind-the-scenes force powering smartphones and servers, Arm now aims to step into the spotlight and reshape the semiconductor landscape.

The timing is critical. Chiplets, small modular components that can be combined into powerful processors, are revolutionizing chipmaking by cutting costs and speeding development. Backed by momentum from the CHIPS Act's focus on advanced packaging and supply-chain resilience, this design shift is viewed as essential to strengthening a secure U.S. technology base. With Arm entering the arena, partners and rivals alike face a new competitive reality.

In January 2025, Arm released its Chiplet System Architecture (CSA) specification and brought more than 60 industry players on board. The company's strategy zeroes in on surging demand for artificial intelligence and cloud computing, where efficiency and speed are paramount. In August 2025, Arm rehired Rami Sinno, a leading engineer from Amazon's chip division, underscoring its intent to compete head-on rather than remain a background supplier. CEO René Haas says Arm is "building chiplets or even possible solutions," and is stepping up R&D accordingly.

Arm and partners report early testing on "Project Leapfrog" that suggests around three times the power-efficiency compared with conventional GPU-based Al training, figures that still need independent validation. While such performance gains would mark a breakthrough, analysts caution that the outcomes remain uncertain and must be proven in real-world deployments.

Industry observers see both opportunity and friction. Arm could unlock fresh revenue and cement its role at the center of next-generation computing. But longtime customers such as Nvidia and Qualcomm may bristle at Arm's new ambitions, which tread closer to their turf. Success will depend on Arm's ability to pursue new markets without alienating the ecosystem it helped build.

Still, the upside is considerable. By promoting open standards and collaboration, Arm hopes to accelerate chiplet adoption across industries, putting advanced computing power within reach for more players, not just tech giants.

In a moment when semiconductors underpin national competitiveness, Arm's pivot signals more than corporate reinvention. It is a bet on chiplets as the foundation of the next computing era, an innovation that could redefine how America builds, scales, and secures its technological future.