On the verge of going public, Arm could lead historic competitors to put their differences aside and unite
It is very likely that you have a cell phone or tablet. Maybe it’s even reading these words on the screen of one of these devices. That being the case, you are one of the many people on the planet who benefit from Arm ‘s services . The same goes if you are accessing our blog from a Mac with M1 , the processor that leaves all competition behind. Behind the mighty Apple Silicon lineup, it’s Arm’s technology that makes it all work.
Even though it doesn’t have as strong a name as other semiconductor companies such as Intel , Qualcomm and MediaTek , Arm is today one of the most important players in this market. What it delivers, no competitor can match. Global companies depend on your technology. Alternatives have already been tried, and failed. Arm doesn’t have a competitor hot on its heels.
It is not strange, therefore, that the market is attentive to the directions of this chip company based in England. What happens to Arm could impact the entire industry, which is why the idea of it being absorbed by some other player is viewed with fear by its customers. It’s not today that Arm’s fate takes the sleep of many CEOs around the world.
A chip company that doesn’t make chips
Arm offers a kind of architecture for . It doesn’t produce them, but licenses the designs and instruction sets that make them work. Other companies will handle the manufacturing, and may use the licensed material to create products that suit your needs.
The M1 is currently the best-known Arm processor in computers, but mobile devices are where this architecture shines. Unlike Intel’s x86, designed for PCs and other devices that need performance , Arm has focused since its inception on smaller devices. In them, what counts is efficiency and speed .
This has to do with how Arm chips follow instructions. While an x86 processor solves a given task in three steps, the Arm might need ten and still be faster. We can appeal to Emerson Alecrim, computer scientist and author here at Tecnoblog , to explain this apparent contradiction.
“The x86 is like a truck that, regardless of the task, will use a lot of power, and Arm will do it with a little less complexity. And if there is noticeable complexity, she will do it in more steps, but because each step is simple, she can do it quickly.”Emerson Rosemary
That’s the kind of efficiency that mobile devices need, and that’s what Arm delivers. Hence its strategic position in an extremely competitive market, licensing chips to the main players in the semiconductor field.
What if everyone had a little piece of Arm?
In 2020, Nvidia tried to acquire Arm. It would be a difficult process, subject to scrutiny by various antitrust bodies around the world, but the company seemed pretty sure what it wanted. The problem is that nobody liked the idea.
Qualcomm, one of Arm’s main partners, formally objected. Google and Microsoft too, albeit only behind the scenes. The fear was that Nvidia would become a very powerful competitor by absorbing a company so fundamental to the market as a whole. Huawei also presented its objection, pointing out the fact that Nvidia is an American company, and therefore contrary to Chinese interests.
The pressure was so great, including the antitrust bodies, that Nvidia dropped the gamble . All Arm’s partners celebrated, after all, she would no longer have a single controller capable of radically changing her direction. But now Arm is about to become a publicly traded company. Which raises new fears.
What if there’s a hostile takeover, like Elon Musk ‘s takeover of Twitter ? How to avoid this scenario?
If it depends on Qualcomm, Intel and SK Hynix, the solution is to put the competition aside and unite to buy Arm shares. Form a consortium and make the chip company an officially neutral entity.
If the idea works, it would be unprecedented in the tech industry. And it would only consolidate the central place occupied by Arm, the company that everyone needs.
Will this consortium story really work?
If you want to know more about Arm, both from a technical and a business point of view, listen to Tecnocast 246 . There, we explain in more detail what makes the Arm architecture unique and speculate about the future of the company that everyone wants a piece of.