Smartphone to switch of a network of ARM Chips

Thursday, March 1st 2012. | Hardware News

arm chipsARM Holdings Plc (ARM), whose chip designs are used in most smartphones, is set to power the networks that run them as it steps up competition with Intel Corp. in a $9 billion market.

With ARM already working with Hewlett-Packard Co. (HPQ) to bring out chips for computer servers, the same processor will also be directed at the base stations and wireless network equipment, Chief Technology Officer Mike Inglis said in an interview.

“It will be the networks with the ARM architecture,” Inglis said at the Mobile World Congress in Barcelona. “It is the computer farm behind the mobile network.”

ARM’s low-power semiconductor blueprints are increasingly found in larger devices including tablets and other mobile computers as the company competes with Intel (INTC), the world’s largest semiconductor maker. ARM aims to use its faster processor in the servers, the machines running websites and corporate networks, to help companies rein in energy costs.

“It is another obvious opportunity for them to move into a market which is right now based on Intel,” said Vijay Anand, an analyst at Espirito Santo. (BES) “ARM’s chips are low-power but they have been trying to improve their performance.”

At the Barcelona event, LSI Corp. (LSI) signed a licensing agreement to use ARM’s faster processor in mobile broadband networks, while Texas Instruments Inc. (TXN) is using the ARM blueprint to build chips for base-station infrastructure.
By 2017

The companies may start producing chips in about a year and a half with shipments beginning from a range of 2014 to 2017, Inglis said.

“A lot of the chips for base stations are very specialized and ARM’s designs would be fit only for limited applications inside a base station,” said Pierre Ferragu, an analyst at Sanford C Bernstein. “It’s not something you can compare with their smartphone presence.”

ARM, which powers Apple Inc. (AAPL)’s iPhone, has benefitted from soaring demand for the chips used in smartphones as data traffic surges on the mobile networks. The Cambridge, England-based company is also moving into the personal computer market with the release of Microsoft Corp (MSFT)’s next Windows operating system that will run on ARM chips for the first time.

In the same way, ARM will require the software for servers to be developed before chips can be shipped, according to Nick Hyslop, an analyst at RBC Capital Markets.

“The software will be the barrier for the next three years,” he said. About 40 percent of global spending on semiconductors is in the computing market including PCs and servers, Hyslop said. “And ARM’s not yet in it.”

ARM climbed 2 pence, or 0.4 percent, to 571.5 pence at 8:51 a.m. in London. The stock had dropped about 8 percent in the 12 months through yesterday.

The market for server processors was worth about $9 billion in 2011, according Framingham, Massachusetts-based researcher IDC.

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