ARM has announced its financial performance and key achievements for the second quarter of 2024, showcasing significant growth and advancements across various segments.
ARM has reported sales revenue of $939 million (up 39 percent) in Q2 2024. ARM says the subscription business model is enabling Arm technology to be deployed in chip designs across all divisions of large companies.
ARM says 100 billion AI-ready Arm-based chips will ship by end of FY 2026.
Financial Highlights:
Armv9 Technology: Chips based on Armv9 technology now contribute approximately 25 percent of ARM’s royalty revenue, up from 20 percent last quarter.
Mobile Market: Increased adoption of Armv9 in the mobile market drove a 50 percent year-over-year increase in smartphone royalty revenue in Q1.
Technological Advancements:
AI Migration: The migration of AI from the cloud to edge devices is expected to drive higher compute demand per device. ARM’s significant market share positions it well to benefit from this trend, potentially increasing royalty revenue per chip.
Energy-Efficient Compute: The growing demand for energy-efficient compute, driven by AI’s substantial energy requirements, has bolstered ARM’s compute platform as the most power-efficient solution available.
Product Launches and Collaborations:
Microsoft Copilot+ PCs: Microsoft announced its Copilot+ PCs on ARM, offering double the battery life of the closest PC competitor and matching the performance of ARM-based MacOS counterparts. Major software applications and developer tools now run natively on Windows on ARM, ensuring a seamless user experience.
Google Axion Products: Google’s AI-capable Axion products for data centers provide 50 percent better performance and up to 60 percent better energy efficiency compared to legacy solutions.
AWS Graviton4: AWS introduced the high-performance, energy-efficient Graviton4, delivering up to 30 percent better compute performance than Graviton3. AWS now has 50,000 customers using its Graviton instances, including SAP, SmugMug, and Epic Games.
Innovations in AI and Edge Computing:
Arm Ethos-U85: ARM introduced the Ethos-U85, which boosts performance four-fold for edge AI applications such as factory automation, object detection, and image classification.
Arm Compute Subsystems (CSS): ARM is increasing investments in CSS, which accelerates customers’ time-to-market and reduces development costs. The latest CSS for Client enhances AI capabilities in next-generation smartphones and PCs.
New Software Libraries:
KleidiAI: ARM introduced KleidiAI software libraries to enhance the performance of generative AI workloads on ARM-based devices, potentially tripling the speed for time-to-first token for Large Language Models (LLMs).
Automotive Innovations:
Armv9-Based CSS for Automotive: ARM has started signing agreements for its Armv9-based CSS for Automotive, announced last quarter. This solution aims to support the development of software-defined vehicle systems for Level 2+ and Level 3 autonomous vehicles. Tata Technologies is collaborating to integrate its automotive software solutions with CSS for Automotive, accelerating the development timelines of high-performance vehicle computing systems.
Ecosystem Growth:
Software and Design Partners: ARM’s ecosystem continues to expand, now encompassing over 20 million software developers, up from 15 million a year ago. This growth drives demand for ARM’s compute platform solutions, creating a virtuous cycle of increased software development and platform demand.
New and Existing Partners: New companies are joining ARM’s ecosystem, while existing customers are leveraging their ARM technology expertise across additional markets. Google and Microsoft recently announced their first ARM-based chips for data centers.
Collaborations and Partnerships:
Mediatek: Mediatek has joined ARM Total Design, a fast-growing ecosystem aimed at accelerating the development of data center chips to meet the performance and efficiency needs of AI applications. This brings the total number of ARM Total Design partners to 25 since its launch late last year.
Google: Google has announced new AI capabilities for Android phones, integrating their Gemini AI model directly into Android. Currently, 70 percent of AI-enabled apps on the Google Play Store run on the ARM CPU, and the addition of Gemini will enable more apps to utilize the ARM compute platform.
Baburajan Kizhakedath