What Does ARM Actually Do?

Arm is a British microprocessor designer founded and headquartered in Cambridge which licenses its technology and products to semiconductor companies.

Arm has adopted a unique yet effective business model where they don’t actually manufacture any microprocessors themselves but simply ‘license out’ their state-of-the-art semiconductor technology to ‘partners’ in return for upfront license fees. Additionally, they receive ongoing royalties (typically a percentage cut) on every chip sold anywhere in the world. The best part is that they’ve designed their products in such a way that they’re suitable for multiple applications meaning their market, direct or indirect, is essentially most of the technological world.

Arm’s microchips have been used in servers, smartphones, tablets, televisions, wearable tech, smart cars, drones and electronic passports just to name a few applications.

Recently, US-based GPU designer and chip maker Nvidia has announced that it will acquire Arm Holdings for $40 billion. As GPUs currently focus on parallel computations, they are useful for data processing and machine learning applications meaning team work with Arm’s chip designs would result in insane powerhouses being crafted.

It will be interesting to see whether:

• Nvidia becomes a global leader in the world of microprocessors, graphics & IoT in the coming years
• companies like Apple, Samsung and Intel fight against a potential monopoly being created and switch to alternative suppliers
• there will be any changes to Arm’s current licensing business model