In March 2026, Arm announced a semiconductor of its own design, the AGI CPU, aimed at AI data centers. It is the first product the British company has made itself, and TSMC will manufacture it.
Arm, part of SoftBank Group, built its business licensing chip designs and collecting royalties on them. Now it is selling a chip it designed. That shift is one more blurring of the lines that once separated the industry's roles.
Design-only companies are called fabless. Companies that supply design data for circuit components are IP providers. Contract manufacturers are foundries, and the firms that assemble and test finished chips are known as OSATs. Companies that handle everything from design to manufacturing are integrated device manufacturers, or IDMs.
A secret TSMC gave away
Arm has widened its business from IP provider to fabless, and it leaves manufacturing to a foundry. Behind that arrangement sits a choice: TSMC showed customers information that Japanese companies would have kept in-house, and built a ring of partners around the disclosure.
Masanori Kikuchi, a former NEC executive, reads the gap between the two sides as a difference in engineering philosophy. Japanese chipmakers held more than 50% of the global market in the late 1980s. Kikuchi asks why they lost the leading role, and answers from what TSMC was willing to tell the companies placing orders.
Kikuchi was born in Karafuto in 1944 and graduated from the University of Tokyo's department of physics. He spent his career in semiconductors at NEC, moving from device and process development into production engineering before heading the company's semiconductor business group and serving as chief engineer.
He later served as executive director of the Semiconductor Equipment Association of Japan, and has been an adviser to the Semiconductor Energy Laboratory since August 2007 and to Naigai Tec since July 2024. He has written widely on the industry, including books explaining semiconductors and chip plants.