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

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.

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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.

ChampagneBottles
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.

ArmBarn
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

About

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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12 comments
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  • re Inside Arm:

    Thank you Nick for an article worth reading. A rare event these days on this site.
    Saxwulf
  • Nice Article

    A very good insight on how the processor company is able to compete(and successfully too!) with one of the most entrenched chip technologies (x86) in the personal computing space. I do think both the chip paradigms have their place in the technology field but ARM has more headroom to grow in this sector in near term.
    ramdasviky
  • Intel Lacks Economies Of Scale

    In terms of relative volumes, x86 is a drop in the bucket compared to ARM. And with only one-and-a-fraction companies making x86 chips, versus several dozen making ARM ones, you can see how the latter benefits from a competitive marketplace that simply doesn't exist for the former. Intel still works on the basis of preventing Atom chips from cannibalizing sales of more lucrative Core chips, by tight restrictions on the categories of products you can make with each chip family, while ARM is a complete free-for-all, where you are free to imagine the product first, then look for one or more suitable chip suppliers.

    Or, to put it another way, an x86-based mobile market could never have been as vibrant as the ARM-based one has turned out.
    ldo17
  • Let's make things smarter

    Number of connected devices in 2020 will be over 20 billion... future is looking bright for ARM and embedded software. Tass all folks
    Tim Beckers
  • A nice little British success story

    Nice to see that we (UK) can still be relevant in the modern computing arena.
    The prospect of machine to machine comms interactions really sound exciting.
    JulesVerny
  • If recent news is anything to go by

    Intel is shooting itself deliberately in the foot by seriously contemplating BGA boards as a rule.

    Did i read correctly (..somewhere) that ARM is in talks with AMD over a new line of processors for AMD? Someone .. anyone?
    thx-1138_
  • Intel has pockets full of money

    And that might kill ARM. When eventually Intel has a CPU similar to ARM CPUs in its portfolio it can easily pay potential customers money for "advertising" their CPU (like the infamous "Intel inside" logo).
    EnticingHavoc
  • Inside ARM: The British success story taking the chip world by storm

    @EnticingHavoc
    sun had tons of money, the company could even afford to buy apple (but decided not to) and even bigger companies during its heydays. and it had the most awesome processor that were way way ahead of intel. but where is sun now? intel should continue its arm-twisting marketing if it wants to see itself relevant in the future. otherwise, no amount of money can save it from losing ground to the competition ...
    kc63092@...
  • Nice story

    The good thing about ARM is that it doesn't own everything. It doesn't own the fabrication plants. ARM allows others to make money on the processors. The licensing model makes it more attractive.

    That was a good read. Thanks, Nick.
    Vbitrate
  • One huge BLOB

    The chip design industry is an amalgamated blob of tech corporations who swap patents among each other or else take up equity ownership stakes. "I'll buy x million non-voting shares of your company to settle the y patent infringement complaint"....
    anthonymaw
  • One success that is probably a lynchpin wasnt mentioned

    Psion...

    Without their little handhelds, there would never have been Symbian, which drove the initial 'smart' mobile revolution.

    Symbian is the evolution of Epoch, which was what ran on the early Psions. Without an ARM processor, we'd still be using monolithic phones with a hardware OS that only made phonecalls and sent basic SMS messages like they used to... ARM have actually been quietly revolutionising the microprocessor industry for decades.
    SiO2
  • ARM - I remember its early days at Acorn

    I heard about a presentation of a new chip through the grapevine while working for Sinclair in Cambridge. I attended and was astonished by the elegance of the design and instruction set. I immediately wrote to Acorn asking for a job working on the ARM (which then stood for Acorn Risc Machine). Acorn took me on and I wrote a machine code monitor for initial testing of the first Archimedes circuit boards. I have always been a fan of the ARM design and am delighted that it has proved such a success. All too often technical excellence doesn't win the day but ARM obviously had the right approach and did win the day. There's room for more than one chip designer and I understand Intel's envy of ARM's success in the mobile world. Even if Intel does manage to beat ARM in the MIPS per watt stakes, ARM will have made a huge contribution to reducing energy consumption and forcing its competitiors to go the same route. Well done ARM and more power to your elbow (is an ELBOW something within an ARM?).
    JohnOfStony