SoftBank Group Corp’s chip technology firm Arm Ltd reported record revenue for 2021 on Thursday, and Chief Executive Rene Haas told Reuters that the company’s business for innovative chip designs shows a bright future.
SoftBank intends to go public with the British IT firm. A deal to sell it to Nvidia Corp. of the United States was halted due to regulatory issues.
Arm, which creates the basic blueprint for chip design, made $2.7 billion in revenue last year, up 35% from the previous year. Revenue from the licencing business increased by 61% to $1.13 billion, while royalties, which track the number of chips supplied utilising Arm technology, increased by 20% to $1.54 billion.
Haas said the licensing business is “all about companies spending money with Arm about designing chips for the future”. Asked about the revenue outlook, he said: “We’ve never done over a billion dollars. So I would say that’s a good leading indicator of the demand for the product.”
SoftBank Executive reports that 29.2 billion Arm chips were shipped last year, with roughly 8 billion in the fourth quarter
Arm’s focus on the automotive industry three to four years ago was paying off, he added since revenue from that market more than doubled last year as a result of electrification and increased computing capacity in cars.
“It probably would have been better if there was more supply,” said Haas about Arm’s automotive business.
Haas would not comment on the possible worth of Arm on the public market. Nvidia proposed paying up to $40 billion for Arm in September of 2020. SoftBank paid $32 billion for it.
Haas also stated that a public issue at Arm’s Chinese joint venture had been settled, with previous Chief Executive Allen Wu being fired. According to him, Arm China accounts for around 20% of the company’s revenue.
“One thing I can say is we had great results in this last year and it wouldn’t have happened without the China JV doing well,” he said.
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