Move brings AI-SuperNIC technology in-house as Arm looks to capitalize on surging data center demand
Arm is set to extend its chip design efforts into the world of networking as its latest earnings report revealed it plans to acquire DreamBig Semiconductor.
The SoftBank-owned firm beat both its revenue and adjusted EPS guidance in the second-quarter fiscal 2026 to reach revenues of $1.14 billion, compared to just $844 million a year ago.
Buried in its 6-K filing, however, was confirmation that Arm agreed in October to acquire all outstanding equity interests of DreamBig in a cash deal worth $265 million.
The deal should close by the end of Q4 FY26, in late March of next year.
Who is DreamBig, the startup Arm is set to acquire?
DreamBig Semiconductor was founded in 2019 by Sohail Syed, a former senior director of engineering at Marvell Semiconductor. It is Syed’s second chip startup, having founded FIRQuest in 2015 before it was acquired by Corigine in 2019.
Based in San Jose, California, DreamBig is developing chiplet technologies for use in data centers, with its hardware specifically designed to handle AI applications.
In January, the startup unveiled its Mercury AI-SuperNIC, which it claims can connect GPUs with “unparalleled efficiency.”
DreamBig’s network accelerator features a remote direct memory access (RDMA) engine to support both RoCE v2 and UEC standards – offering 800 Gb/s of bandwidth and 800 Mpps of throughput, enabling it to support intensive AI workloads.
According to the startup, the monolithic chip can provide networking for both GPUs and tensor processing units, or TPUs, with a chiplet-compatible component providing up to 12.8 Tb/s integrated networking for AI SuperChips.
Also on the startup’s books is former Intel engineering director Steve Majors, who serves as DreamBig’s SVP of engineering. Upon unveiling the Mercury AI-SuperNIC at this year’s CES, Majors said the accelerator is “setting the bar for the next several generations of AI networking.”
DreamBig had enjoyed a partnership with Samsung’s foundry division to bring its hardware to market.
The manufacturing giant was working with DreamBig on its chiplets, leveraging its chip-on-wafer stacking advanced packaging process, SF4X FinFET.
It’s important to note that DreamBig’s prospective parent doesn’t make its own chips, but instead licenses the designs to other semiconductor companies.
It’s unknown at the time of writing what Arm plans to do with DreamBig, but it could potentially license its technology to key customers like Nvidia or Broadcom.
In a statement sent to SDxCentral, an Arm spokesperson said: “DreamBig has deep expertise and intellectual property in the Ethernet area and RDMA controllers, which are key technologies for scale-up and scale-out networking. As demand grows inside the data center, particularly in high-speed communications, this technology will play an important role in broadening Arm’s offerings to end customers.
“The transaction is subject to regulatory approvals; in the meantime, both companies will continue to operate independently.
Arms up
In the years since Nvidia’s failed takeover of Arm, the chip designer has gone from strength to strength, riding the AI wave to new heights with demand for its IP soaring.
The British firm said in July that demand for its chips for use in data centers has soared 14x since 2021, reaching more than 70,000 customers in the burgeoning sector.
Its latest earnings report showed performance remains strong, with its cloud computing and networking segments continuing to perform well. In addition, Arm’s royalty revenue effectively doubled compared to last year’s figures.
In March, news came out that Arm planned to set up a base in Malaysia following an agreement with the country’s government.
While the designer has not made its plans public, it’ll expand into a market that’s doubling down on semiconductor design and manufacturing. Back in April 2024, the Malaysian government unveiled its strategy for what it hopes will be the largest integrated circuit design park in Southeast Asia.
