ARM worried about economic uncertainty

ARM, which powers a diverse array of hardware ranging from smartphones to servers, is bracing itself for subdued sales to continue into the second half of the year as consumers put off purchasing gadgets.
Written by Adrian Kingsley-Hughes, Senior Contributing Editor

Chipmaker ARM is worried about what the future might hold and is putting the brakes on some of its recruitment plans for 2012.

Warren East, CEO of ARM Holdings, told the Financial Times that the subdued sales seen during the first half of 2012  by its customers -- which includes the likes of Qualcomm, Texas Instruments, Samsung, TSMC, and Nvidia -- will continue into the second half of the year. Even more worryingly, he believes that chip sales won't benefit from the usual stronger third and fourth quarters of the year as consumers put off purchasing gadgets.

"Many of the chip companies are indicating that they are not expecting an uplift and mathematically that will hit us," East said.

This warning from ARM's CEO should be of huge concern to the industry as a whole, given that ARM silicon, along with ARM-licensed technology, powers a vast amount of hardware, from mobile gadgets and smart TVs to and servers, It should be of particular concern to Microsoft and its tablet hardware partners, who are preparing to launch a multitude of Windows RT tablets powered by ARM technology.

It's not all bad news for ARM though. East says that he expects ARM to continue growing, just at a slower rate. He added that he was "encouraged" by plans from companies such as Dell to release new low-power servers based around ARM technology. The company is also working with Taiwanese semiconductor manufacturing TSMC on server chip development.

East also says that Moore's law -- which says that the number of transistors that can be fitted into a chip doubles approximately every two years -- is "alive and kicking" and that the current CMOS technology has at least another 10 years until there's a "discontinuity".

Image source: ARM.

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