Build story · United Kingdom · 1990–2023
Arm: designing chips and letting others make them
Arm licenses energy-efficient chip designs rather than making chips. Its designs power nearly all smartphones, with tens of billions of Arm-based chips shipped a year.
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
by the numbers
- Founded
- 1990
- Engineers at start
- about a dozen
- SoftBank acquisition (2016)
- about £24 billion
- Nasdaq relisting
- 2023
What happened
Arm was spun out of British computer maker Acorn in 1990 as a joint venture with Apple and chipmaker VLSI, starting with about a dozen engineers near Cambridge. Its chip design was simple and energy-efficient — ideal for battery-powered devices.
Rather than manufacture chips, Arm licensed its designs to other companies and earned royalties on every chip made. Phone makers such as Nokia used Arm-based chips, and when smartphones arrived, Arm became the standard. Its business model meant every partner's success increased Arm's royalties.
SoftBank bought Arm in 2016 for about £24 billion, and Arm relisted on Nasdaq in 2023. Partners ship tens of billions of Arm-based chips a year, used in almost all smartphones.
Timeline
- 1990
Arm spun out of Acorn.
- 1993
Arm chip powers Apple's Newton.
- 2016
Acquired by SoftBank.
- 2023
Nasdaq IPO.
what made it work
- Licensing scaled without factories.
- Energy efficiency matched the mobile revolution.
- Neutral partner to many chipmakers.
the lesson
Licensing intellectual property to many partners can create a global standard and scalable royalty income.
Apply it to your business
- 1Could you license your know-how instead of producing?
- 2Design for where the market is heading.
- 3Neutrality can make you everyone's partner.
Laws at work in this story
Figures are rounded and drawn from public reports, company filings and widely cited coverage at the time. Check the company's latest filings before relying on any number.