Oppstar’s real work starts now

INVESTORS went euphoric when Oppstar Bhd was awarded software tools by Arm Holdings, driving the stock limit-up when the news broke.

Recall that Oppstar was given the British multinational’s Arm flexible access (AFA) design token earlier this week.

As part of a deal inked between the Malaysian government and Arm last year, the country secured access to seven compute subsystems (CSS) licences and 25 AFAs tokens for local semiconductor players.

The Malaysia-Arm deal is mainly targeted at local integrated circuit design firms.

It effectively gives local chip design companies subsidised access to Arm’s technology stack – access that would otherwise be prohibitively expensive for many domestic firms and startups.

Along with Oppstar, Main Market-bound SkyeChip Bhd also received AFA access, while unlisted GreatAsic Technology Sdn Bhd obtained both CSS and AFA tokens.

Industry licensing costs for Arm technology can run into hundreds of thousands to millions of US dollars.

However, merely being awarded the software tools is by no means an assurance of being able to monetise it.

Developing a chip remains a long, capital-intensive and technically demanding process that can take years before any meaningful revenue is generated.

While Arm’s AFA and CSS programmes lower barriers to entry, companies still need to invest heavily in engineering talent, software tools, prototyping and eventual manufacturing.

After securing the licences, chip designers typically move into the architecture and design phase, followed by verification and simulation – a time-consuming stage where companies test whether the chip functions correctly under thousands of scenarios.

Next comes the tape-out stage, where the final chip design is submitted to a semiconductor foundry for fabrication.

Even with subsidised Arm access, companies must still pay tape-out fees, wafer production costs and manufacturing expenses.

Securing foundry capacity itself can also be challenging.

Analysts note that Arm’s CSS platform may improve the likelihood of successful tape-out because the designs are already “silicon-proven”, reducing development risk and shortening time-to-market from roughly three to four years to about one to one-and-a-half years.

Even after fabrication, chips must still undergo packaging, testing and qualification before commercial deployment.

The bigger challenge ultimately lies in commercialisation – namely whether Malaysian firms can secure customers, scale production and compete against established global semiconductor players with far larger research and development budgets and entrenched ecosystems.

Kudos to Oppstar for having won the Arm tokens.