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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...with two major handset manufacturers, Lenovo and Motorola, announcing phones based on Intel processors. Intel, to back up its move into mobile and meet the current demand for energy-efficient chips, is focusing on developing its own low-power architecture. Next year it will launch its Haswell processor, a chip whose draw will be as low as 8W and which Intel claims will consume up to 41-percent less power than its predecessors.

There is a school of thought that, as Intel continues to focus on lowering power consumption of its chips, it will close the power gap between itself and ARM – removing ARM's ace card in mobile computing and its hopes for breaking into the server space.

Arm Canteen
The canteen inside ARM's main building in its Cambridge HQ. Photo: Nick Heath / ZDNet

And while Intel pushes down power consumption, ARM is moving in the opposite direction with some of its latest chips, such as the smartphone, notebook and server-focused A15, which consume more energy than other ARM models in the pursuit of better performance.

Nick Dillon, senior analyst in Ovum's devices and platforms team, believes Intel will face a struggle to make headway against ARM in the mobile market, given how many handsets are built using ARM-based chipsets.

"The ARM chipsets have it pretty well sewn up, for the mass market especially, and there's no real demand from the hardware manufacturers for any other alternative," he said.

"We're moving onto higher-power processors that play to Intel's strengths better, but at the same time those handset manufacturers are going to be very well embedded with ARM — a lot of the optimisations on the hardware and software side are around ARM. It's that classic disruptive technology that comes in underneath and has matured over time and now does the job at a lower price and greater efficiency."

ARM's Muller argues that ARM can retain a technical advantage at the low-power end of the market. But, more importantly, he believes that ARM's key advantage will come from the diversity of its ecosystem: ARM licenses its chip designs to hundreds of semi-conductor companies, which build that design into their own chips before selling them into a broad spectrum of markets. Markets – be it for servers or mobile computing – are better served, says Muller, by the innovation of hundreds or thousands of companies than by the smaller ecosystems of its competitors.

"The reason that ARM's been successful has more to do with the business model than the technology" — Mike Muller, ARM

"The reason that ARM's been successful has more to do with the business model than the technology. [By] licensing a number of different chip companies to do design we have diversity of competition within the ecosystem.

"I don't believe that any one company can design all the chips on the planet. You need to have different people, different specialisations and expertise to scale from little microcontrollers to supercomputers. The business model provides the diversity and that diversity is one of the reasons the ARM ecosystem has become so strong."

Muller claims that ARM's entry into the server market could bring similar diversity to the datacentre, with partners offering systems whose architectures are tuned for specific uses out of the box, be that supporting a search engine or serving SaaS.

Gartner's Mushell points out that while ARM's partners might be able to build many different server chipsets, each targeting a different type of server workload, the difficulty would lie in generating a market for each.

"ARM server folks — Calxeda, Applied Micro, AMD — will make many different chips in the microserver market. The big question is: which one of the them will hit the mother lode?" he said.

"With a market of nine to 10 million servers you've got to turn over a significant amount of that to make it a meaningful market for yourself. You've got to target a sweet spot, a big customer, with a big application, with a big need for reduction. All those stars need to line up in your favour at the same time."

What could count in Intel's favour is its control over the chip manufacturing process. Over the course of decades making chips in its foundries Intel has managed to achieve the highest yields for its chips in the business. It also has direct control over improvements at its chip fabs, while ARM has to rely on innovations by its chip-making partners like TSMC, Samsung and Global Foundries.

Muller said that Intel does have the lead in manufacturing technologies "on some levels" but that when it came to manufacturing low-power, low-cost chipsets ARM's partners like TSMC can ramp to volume more effectively, because "that's what they do for a living".

However any advantage that Muller perceives for ARM and its partners over Intel in manufacturing low-power chips is not guaranteed to remain in place as Intel shifts its manufacturing process to produce more low-power chips like Haswell.

New horizons

What about ARM's core market? Where next for ARM in the smartphone and tablet space? With the latest smartphones able to stream high definition video and push around 3D graphics with relative ease – will demand for mobile performance tail off?

Not so argues Muller, who believes that users will demand more processing muscle from their handsets as we move from prodding and poking mobile computers to talking to them and even more exotic forms of interaction.

"The PC market seemed to reach some sort of plateau in performance. People went 'My PC is good enough'. I don't think we're anywhere near there yet in mobile phones," he says.

"There are a whole loads of use cases, different ways of doing UI when freed from that keyboard and mouse paradigm.

"Voice recognition is an obvious use case on phones. Could you make that a lot better? Yes, but that requires more compute. The augmented virtual reality stuff that people do with phones? That could also get a whole lot better."

ARM is continuing to push the performance of its chips destined for the mobile market. Earlier this year ARM announced its 64-bit Cortex A50 chip series that it said will deliver up to three times the performance of today's top of the range smartphones.

Looking beyond mobile, Muller says that a big market opportunity for ARM is in the machine to machine (M2M) comms market once the internet of things of things takes off. The internet of things is a vision of the future where low-power, networked computer chips are embedded in everyday items, from lightbulbs to car keys to food packaging to door locks. Giving the objects around us the ability to communicate the likes of where they are and what they are doing, and also react to messages, opens up the possibility of locating a lost pair of glasses with an internet search or a shopping basket that suggests healthier alternatives to your purchases.

Muller sees a massive future role for ARM in providing embedded computer chips for the sensors and the network infrastructure needed to support the internet of things. An example is ARM's Cortex-M0+, whose small size and very low power-consumption is suited to use in the sort of tiny, sub-$1 embedded sensors that will be needed.

"The price point for the silicon is at a point where you could put the required intelligence in for marginal cost and the comms networks and infrastructures are starting to become pervasive," he says.

"It's starting to happen now," Muller adds, predicting a five-to-10-year build-up to it becoming a significant market for the IT industry.

"The PC market seemed to reach some sort of plateau in performance. People went 'My PC is good enough'. I don't think we're anywhere near there yet in mobile phones" — Mike Muller, ARM

"It's a really exciting market and people don't quite know what it is. People don't know what they are going to do with it, what are the services it will enable.

"It's like the early days of the internet, people were talking about stuff that sounded stupid and most of it was, and then other stuff appeared that you never thought of, that turned out to be what everybody wanted."

Whatever the future holds for ARM, Muller is braced for change. He was one of the 12 engineers who has been with ARM from the start, from when it was a barn on the outskirts of Cambridge with only one licensing partner to its name.

ARM's headquarters might be located in the same city but that's about all that remains the same. Today the company employs about 2,200 people worldwide, shipped 7.9 billion chips by its customers and last year reported £230m profit before tax.

"I sometimes still naively think I work for a small company. You used to know everybody, what they did and who their wives were. Now we occasionally have big company meetings and I think 'I don't know who half these people are. What do they do?'.

"It's become a completely different business. That's why it's stayed interesting because the problems today are completely different from the problems 20 years ago," Muller says.

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