Inside ARM: The British success story taking the chip world by storm

Summary:A look inside the British chip designer, from its origins in a Cambridge barn to its current champagne-marked successes and a future where M2M is key.

A row of large, empty Champagne bottles stretches across the back wall of the canteen at ARM's headquarters in Cambridge.

Each of these bottles marks another milestone for the chip designer — another processor released or patent awarded, with the chip model scribbled on the label alongside the names of Champagne's great houses. The dozens of bottles are testament to the success of a British company in challenging the giants of Silicon Valley, all from an unremarkable industrial estate in the middle of England.

The chances are that you're never more than a couple of feet from an ARM chip. They not only sit in mobile phones, tablet PCs and MP3 players but also the likes of hard drives, digital cameras, home broadband hubs, anti-lock brakes, smart cards and embedded microcontrollers serving a range of industries.

ARM has, to a great extent, powered the mobile computing revolution, with its chips sitting inside more than 95 per cent of mobile phones — including the iPhone, iPad and nearly all Android devices. But it doesn't make the tablets or smartphones or even the processors that go inside them. ARM designs the cores of the processors that sit inside these devices – laying out the microscopic labyrinth of logic gates that shunt around the digital bits.

Champagne bottles celebrating company milestones in ARM's canteen at its Cambridge headquarters. Image: Nick Heath / ZDNet

Designing chips and licensing those designs to third parties has been ARM's business since its formation in 1990. And now it's looking at new markets for its chips, preparing for opportunities created by cloud computing and the internet of things.

Today ARM has more than 900 deals that license companies, mainly semi-conductor manufacturers, to use its chip designs across many different markets.

Looking at the drained bottles and ARM's dominance of the smartphone market it would be easy to think the company's ascendency was a trail of uninterrupted success. ARM's overnight success, however, only came after more than a decade of hard slog, as Mike Muller, CTO and co-founder of ARM explains.

"People say 'ARM's been so successful' and you're thinking, 'for the first 10 years it didn't always feel like that'. Nobody was paying any attention and suddenly there's a whole lot of interest and it appears to have come from nowhere. Actually there's a whole lot of homework being done before that," he said.

In general ARM's business model means it takes years before a chip design delivers regular returns, with a processor design typically taking ARM two to three years to develop. A partner company will buy a licence that allows them to incorporate that design into their chips and from there it can then take another three to four years for the chip that incorporates ARM's design to ship, at which point ARM starts receiving royalties based on the sales.

The Cambridge-based company was born out of the PC maker Acorn. Acorn was a household name in the UK in the 1980s thanks to the success of BBC Micro, which was the staple computer of UK schools at the time and sold about one and a half million units.

BBC Micro
ARM was born out of Acorn, maker of the legendary UK computer the BBC Micro (pictured here at the UK's National Museum of Computing). Image: Charles McLellan

ARM was formed in 1990, when Acorn decided to spin off its research and development division into a joint venture with Apple and the chip manufacturer VLSI. The company began life designing and licensing high performance 32-bit RISC (reduced instruction set) processors, which were used by Acorn in its Archimedes computer range — its follow-up to the BBC. To this day ARM still designs 32-bit RISC chips, with its first 64-bit chips announced last year.

One of the first devices to include an ARM-based chip was an Apple tablet designed to revolutionise computing on the move. It might sound familiar but it wasn't the Apple iPad — it was the Apple Newton, the handheld computer that reportedly cost Apple $100m to develop in the early 1990s only to be scrapped by Steve Jobs soon after his return to the company in 1997.

Throughout the early 1990s ARM focused on expanding its network of licensing partners worldwide, starting with UK semiconductor company GEC Plessey in 1992, then Sharp, Texas Instruments (TI) and others.

It was through TI that ARM fell into designing chips for mobile phones. TI had licensed ARM's chips for use in the automotive industry. But in the mid-1990s Nokia came knocking, and licensed a TI chipset based on the ARM 7 for use in its first 2G mobile phone, the 6110.

The converted barn that was ARM's home until 1998. Image: ARM

As mobile handset manufacturers seeking to maximise battery life were won over by how much performance ARM's Risc-based chips could squeeze out of a watt of power, more and more of them started incorporating ARM-based chips in their devices. By 1998 business was starting to take off for ARM, its partners had shipped 50 million of its products, it floated on the stock market and the company was able to move out the converted barn that had been its home for eight years.

ARM carved out a niche for itself; its Risc architecture chips weren't the most powerful or the cheapest but they struck a balance between energy consumption, processing power and cost. The balance is still what sells ARM-based chips today, says Muller.

"If you're just interested in performance, power or cost, there's probably another solution but if you're trying to find some balance, then ARM is probably the right choice," he says.

More than just mobile

For decades, Intel has been the main company making the chips we use for computing, from home and office PCs to the servers in datacentres.

But the changing demands of computer users are chiming with ARM's energy-efficient chip architecture. The shift to mobile computing demands...

Topics: ARM, Data Centers, Hardware, Intel, Mobility, Processors, Servers, United Kingdom


Nick Heath is chief reporter for TechRepublic UK. He writes about the technology that IT-decision makers need to know about, and the latest happenings in the European tech scene.

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