ARM across the Atlantic - chip designer makes a meal of US
It was the first Cambridge technology company to literally put an ARM around the world.
Microprocessor designer, ARM Holdings, has now shipped more chips globally than Intel despite having only a fraction of its American rival’s revenues, manpower and resources.
And its semiconductor intellectual property has been adopted as the architecture of choice by the world’s thought leaders fashioning new generations of digital electronic products.
From the platform of a Cambridge UK headquarters, ARM has established a self-sustaining community of end-users and partners that spans the planet. The company has just celebrated its 21st anniversary but in truth it came of age not long after spinning out from Acorn in 1990.
It recognised the importance of the US market from the start. ARM opened a Silicon Valley office in 1994 and when it floated in London in April 1998, the company made it a double-header with a secondary listing on the American technology market, Nasdaq.
It was an astute play. Its share price tripled in the States last year and was only pegged back recently because analysts feared it was all too good to be true. But, as the new alliance with Microsoft Corporation evidenced, it clearly isn’t!
ARM’s chips in Microsoft technology will push Windows software into cars and digital televisions, each burgeoning markets. ARM is also working with another American institution, Qualcomm, the Californian company that in recent months has expanded its influence and collaborative efforts in Cambridge.
After months of speculation that ARM may be a takeover target by an Intel or an Apple, the Cambridge company was the one that did the acquiring by snapping up Texas company Obsidian Software for an undisclosed sum last month. Obsidian is a market leader in verification and validation used in the design of increasingly complex processors. It is privately owned with its HQ in Austin, Texas.
ARM said that as System on Chip (SoCs) and processors grew in complexity there was an increasing need to develop more sophisticated verification strategies.
The Obsidian acquisition augmented its drive in matching its verification strategies with the rate of change in its high performance, complex SoC IP components, the company said.
ARM and Obsidian have had a good and long relationship which started with early work on Cortex A-8, according to Mike Inglis, GM and EVP of ARM’s processor division. He said: “The technology and people that will come with this acquisition are a significant addition to our capabilities in maximising quality and reducing time to market of ARM-based SoCs.”
Eric Hennenhoefer, president of Obsidian Software, added: “The ARM ecosystem will be extended by the addition of Obsidian Software’s verification solutions, which will accelerate the success of the ARM architecture in the marketplace.”
The Obsidian Software validation team will become part of an ARM Processor validation team based in Austin, Texas.
Obsidian has gross assets valued at less than $2m; it has been providing processor verification products, verification consulting and training services to processor designers since 1997. Obsidian’s RAVEN software has been used by many of the world’s leading semiconductor companies.ARM CEO Warren East also lauded the strategic importance of the move in a recent interview with Business Weekly.
He was buoyed by the fact that ARM partners have shipped around 25 billion ARM-based chips and that the market anticipates more than 100 billion cumulative ARM-based chips by 2020. But he prefers to keep an eye on the future and many more global opportunities for the business.
East said: “There is huge potential for further growth. Our market share in 2010 rose to 28 per cent. That means 72 per cent of processors use other architecture – now that’s a big opportunity for us.”
East believes the transatlantic power base model has been healthy for the company – not so much a case of hands across the water as ARMs across the sea.
The company has genuine coast-to-coast coverage in the States. It has a main regional office in San Jose, Texan operations in Austin and Plano, bolstered by strategically important centres in Boston, Irvine, Olympia in Washington State, San Diego and Seattle.
As ARM’s American employees brought their 4th July celebrations to a close more than a few shrewd investors were willing to bet that this won’t be the end of the fireworks.
• Photograph shows: ARM CEO, Warren East