Born from the ashes of Acorn Computers in Cambridge 33 years ago, ARM was part of the FTSE 100 (the UK's most important stock index) before being acquired by Japanese investment group SoftBank for £24bn in 2016.
Re-emerging on the public market across the Atlantic with an estimated value of $60 billion, ARM will be led by a new board of directors, including many former generals from AOL, Intel, Qualcomm, most of whom live in the US, 5,000 miles away from ARM's birthplace.
Meanwhile, ARM's experienced former leadership team comes from well-known British companies such as EMI, easyJet, Vodafone and Pilkington.
In fact, this is not the first time ARM has been at risk of being “swallowed up” by the US. Previously, Intel tried to acquire ARM but failed. Authorities also blocked SoftBank’s sale of ARM to Nvidia in early 2022 due to national security risks.
ARM is one of Britain’s most important technology companies. Much of its business still takes place in the UK. The company sells and licenses microprocessor designs that go into everything from smartphones and laptops to industrial sensors, cars and supercomputers. Its fate is closely watched as the chip industry booms.
Choosing Wall Street over London could represent a turning point for the British semiconductor flagship.
ARM has been influenced by the United States from the start. Years before the iPhone, Apple was looking for a new processor for its mobile devices and turned to Acorn. For a modest $2.5 million, the “bitten apple” entered into a joint venture with its onetime rival in the computer industry, and ARM was spun off to serve both.
Even the early technology was American. Acorn’s top engineers – Roger Wilson and Steve Furber – were fascinated by a project at the University of California in 1981 to produce a high-performance CPU on a single chip.
Aimed at the mass market, Wilson and Furber's Acorn RISC Machine – later Advanced RISC Machines (ARM) – was 25 times faster than the BBC Micro, the best-selling computer of the time.
It was used in the Acorn Archimedes computer in 1987 and 6 years later in the Apple MessagePad (later Newton). A few years later, their efforts paid off, in 1997 the Nokia 6110 phone using the ARM design was released.
The application of ARM's instruction set architecture (ISA) – the digital rules that dictate how a device's microprocessor is controlled by software – expanded, along with the company's size.
In August 2004, ARM bought Artisan Components for $913 million. Although investors discounted the deal and it sent its stock price tumbling, ARM viewed the deal as a way to secure a long-term rivalry with Intel, the U.S. chip giant. It also shifted ARM’s focus to the West Coast, where many of its customers were located.
ARM’s licensing fees are relatively low thanks to its popularity. ARM chip designs have been used 250 billion times. ARM now also provides designs for more expensive chips, such as those used in servers. Amazon Web Services’ Graviton chip, for example, contains ARM designs.
After 15 years, ARM's breakthrough in the field is seen as an important growth opportunity, especially with new investors about to list in the US.
The company’s revenue is expected to grow 5.7% in 2022, which is very positive considering the overall smartphone market is in decline. It shows that ARM has the ability to diversify to bring in new revenue streams, especially as artificial intelligence – a technology that requires more powerful and energy-efficient chips – becomes a trend.
Ahead of its IPO, whether it is a British or American company, ARM's future success depends on the "growth at all costs" culture that Wall Street is familiar with.
(According to Telegraph)
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