This Is What Mobile Chip Designer Arm Wants To Add To 5G Networks

The microprocessors running most modern smartphones are based on the designs of Arm Holdings but future networks may empower a much cheaper kind of mobile device. Arm wants to get in on that market, too, with a new design line dubbed Neoverse.

The strategy is based on the arrival of much faster 5G wireless technology over the next few years. The new networks will be so fast and responsive that consumers won’t have to rely as much on their phones for storing media and for powerful calculating and data crunching functions. Carriers like Verizon(VZ, +0.15%) and AT&T (T, +0.03%) say they will be building thousands of mini-data centers throughout their networks to offload much of the computing power, reducing the cost and complexity of phones. The 5G networks are also expected to link up many more smart, connected devices as well as self-driving cars and automated drones. And Arm, a unit of SoftBank Group, says that entire budding infrastructure is the target for its Neoverse line.

Seeing the carriers’ plans, Arm decided “let’s increase the investment and build a specific product line and architectural designs for that particular area,” Drew Henry, senior vice president at Arm, tells Fortune. Henry, who worked previously at Nvidia and Sandisk, said he joined Arm last year specifically to attack this new market segment.

The move also comes as growth in the smartphone market has slowed to a crawl. Arm licensees like Apple (AAPL, +2.66%) and Qualcomm (QCOM, +3.05%)aren’t reporting the massive annual increases in phone shipments they experienced five to 10 years ago, for example.

The goal of the Neoverse line is to provide better security, connectivity, and scalability than current designs, though the market will be the ultimate judge. The first chips, dubbed Ares, will start arriving next year and will be manufactured on a 7-nanometer scale, the most cutting-edge currently available, Arm says. Sticking with its Greek god naming scheme, following generations dubbed Zeus and Poseidon will bring performance improvements of 30% each over the next few years.

The company has already enticed most of the major cloud service providers to partner on the Neoverse project, including Amazon (AMZN, +4.97%), Microsoft(MSFT, +3.02%), and Alibaba (BABA, +4.61%). Telecom equipment makers including Nokia, Ericsson, and Cisco Systems are also on board.

If Arm succeeds, manufacturers and other chipmakers will be licensing its designs as Apple, Samsung, and Qualcomm do today for their mobile phone processors. But other chipmakers who design their own platforms, including Intel, Nvidia, and Advanced Micro Devices, are also targeting devices and data centers for future, 5G-connected networks. – Fortune