Arm Holdings (ARM) stock is up 5% on media reports that the company plans to launch its first artificial intelligence (A.I.) microchip in 2025.
The move would mark Arm’s first foray into the development of A.I. chips.
According to multiple reports, British-based Arm plans to establish an A.I. chip division and will build a prototype by early next year.
Production of a new A.I. chip is expected to begin in autumn 2025.
Currently, Arm focuses on making microchips, semiconductors and processors that are used in smartphones, although the company does make some components for A.I. chips.
Arm will reportedly turn to Taiwan Semiconductor Manufacturing Corp. (TSM) to mass produce its new A.I. chip.
The market for A.I. chips is expected to accelerate in coming years. Estimated at $30 billion U.S. this year, the market is expected to reach $100 billion U.S. by 2029, according to Precedence Research of Canada.
Nvidia (NVDA) currently dominates the global market for A.I. chips with a 75% share. Arm and other chipmakers are aiming to take market share from Nvidia in the fast-growing field.
The stock of Arm Holdings has gained 79% since the company’s market debut last September and now trades at $108.84 U.S. per share.
Japanese holding company Softbank owns a majority of Arm’s stock.
