Which European companies are the top venture capitalists and industry pundits tipping for the top? Our sister publication Computer Business Review has profiled some of those outfits that may make a listing on the US Nasdaq stock market. Here we start a series of those profiles with the UK’s RISC microprocessor design company Advanced Risc […]
Which European companies are the top venture capitalists and industry pundits tipping for the top? Our sister publication Computer Business Review has profiled some of those outfits that may make a listing on the US Nasdaq stock market. Here we start a series of those profiles with the UK’s RISC microprocessor design company Advanced Risc Machines.
When rumors swept through the London stock exchange in March suggesting that microprocessor giant Intel Corp was preparing a bid for minuscule Acorn Computer Group Plc, it was not the embattled proprietary computer maker Intel was believed to be after but its 44% stake in RISC microprocessor design company Advanced Risc Machines Ltd – ARM. The reason? Since ARM was spun out of Acorn Computers in 1990, it has achieved an average annual revenue growth rate of 73%, and has signed a number of alliances with some of the computer industry’s biggest names. ARM partners across the globe include Digital Equipment Corp, Alcatel SA, Cirrus Logic Inc, GEC-Plessey Telecommunications Ltd, NEC Corp, Oki Electric Industrial Co Ltd, Philips Electronics NV, Rockwell International Corp, Samsung Electronics Co, Sharp Corp, Texas Instruments Inc, VLSI Technology Inc and Yamaha Corp. Founded as Acorn RISC Machines in 1985, ARM’s original brief was to design a 32-bit RISC microprocessor for the Acorn Archimedes range of computers. But Acorn never caught on outside of the UK educational sector and a financial crisis at the company in 1990 forced it to float ARM off with a $5.3m investment from Apple Computer Inc and VLSI Technology – in return for a 43% and 7% share in the company respectively.
The company’s chief executive, Robin Saxby, an electrical engineer by trade who formerly worked for Motorola Inc and European Silicon Structures, says his aim now is to turn ARM into the standard microprocessor for portable and embedded computer power in the same way that Intel has become the de facto standard in the desktop personal computer. Many believe he can do it. Although only 3.5 million ARM designs were sold last year, influential industry magazine Microprocessor Report believes that ‘tens of millions of ARM chips could be sold by the end of the decade’ as the electronics industry moves from aging 8-bit processors to more powerful microprocessors for embedded control. The company views its major competitor as Japanese giant Hitachi with its SH processor range, but ARM’s unique selling point is its combination of high performance with low power consumption and price. Our StrongARM processor can perform up to 250 million instructions per second. That’s a higher performance than even a high-end Intel Pentium but it sells for less than $50 and consumes about a tenth of the power, says Saxby. The latest 166Mhz and 200Mhz StrongARM microprocessor products, for example, developed in partnership with DEC, are capable of performing at up to 204 Dhrystone MIPS compared to 169 MIPS for a standard Pentium P200. A 378MHz product is now rumored to be on the way. A further major point in the company’s favor is that the company already has close ties with the desktop software giant Microsoft Corp, which is said to be keen to port Windows CE, its portable device operating system, to the ARM microprocessor. ARM, which had 1996 revenues of some $27.1m and is predicting a rise to $38.9m for 1997, has already established an international base with offices in the US, Japan, Germany and South Korea in addition to its base in the UK. This, hopes Saxby, will help the company execute its initial public offering plans either later this year or early on during next year. An acquisition, however, still remains a distinct possibility for the company.