‘ARM should be slimmed down but kept independent’

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Tudor Brown, the ex-president of ARM, has warned of the risks of allowing the UK-based chip designer to be sold to another semiconductor company.

His comments follow reports that ARM’s current owner, Japan’s Softbank, is in advanced talks to sell the firm to Nvidia, a US firm best known for its graphics chips.

The Nikkei has reported that Taiwanese chip manufacturer TSMC has also expressed interest.

Softbank declined to comment.

Mr Brown was involved with ARM for 29 years.

He co-founded the Cambridge-based company in 1983, and served as its chief technology officer, chief operating officer and president – among other jobs – before stepping down in 2012.

Four years later, the business was acquired by Softbank in a £24.3bn deal.

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Tudor Brown

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Tudor Brown says it would be “sensible” to avoid selling ARM to another company involved in making or designing chips

“I have always believed the Softbank investment and focus on growth was ill-advised, and I think Softbank is coming to accept that now,” Mr Brown told the BBC.

“[But] it would be very bad news for ARM to be sold to any semiconductor company.

“The company should be slimmed down and kept independent to serve the industry from a profitable position of neutrality.”

ARM creates computer-chip designs that others then customise to their own ends. It also develops instruction sets, which define how software controls processors.

Just about every modern mobile phone and smart-home gadget is powered by a chip that relies on one or both of these innovations.

In addition, the PC and computer server industries are also shifting away from Intel and AMD’s x86 chip technology to ARM’s solutions.

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Apple is ditching Intel’s chips to power Mac computers and replacing them with its own, which will incorporate ARM’s technology

Nvidia is among the many companies that pay a licence to use ARM’s technologies in its own chips, and there are concerns that its acquisition of the business would create a conflict of interest.

TSMC is the world’s biggest chip producer – it turns final chip designs into physical products – and Mr Brown said it would also be an unacceptable owner.

“TSMC is a very powerful company and would tip the level playing field, making it much harder for companies wanting to use other foundries – such as UMC, SMIC or Global – or companies with their own fabrication plants such as Samsung and Fujitsu,” he explained.

“Almost whatever happens, if someone from inside the industry buys it, it means the balance gets skewed.”

US sanctions

Mr Brown’s intervention follows that of another ARM co-founder.

The BBC reported on Monday that Hermann Hauser had claimed the sale of ARM to Nvidia would be a disaster, and hoped the UK government would encourage an alternative outcome.

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Amadeus Capital

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Mr Hauser said that if ARM was sold to Nvidia, many of its existing licensees would look to adopt an alternative solution

Mr Brown said he would also prefer the company to either be listed back on to a stock market or sold to an unrelated business. But he questioned how much influence ministers could have at this stage.

“It’s about four years too late,” he said.

“There is some sort of binding agreement given by Softbank to increase headcount in the UK, which could be upheld I guess.

“The trouble is, I am not sure ARM needs twice as many people.”

However, he added that the wider industry would benefit from keeping ARM as a UK-based company.

Doing so could limit the ability of other governments to involve it in diplomatic clashes.

Last year, there was a furore when ARM briefly suspended business with Huawei while it examined the degree to which it was affected by US sanctions.

Despite having offices in the US, it ultimately decided it could go back to letting the Chinese firm use its designs to make chips for smartphones and 5G equipment.

With the Trump administration now targeting a wider range of Chinese firms, one danger would be that the companies judge it too risky to continue basing their chips on ARM’s technologies. That could encourage them to shift over to a rival platform called Risc-V, which is open source but currently less developed.

“At the moment, the ARM intellectual property is overwhelmingly British,” explained Mr Brown.

“This is important as I believe it means ARM is not subject to US export laws.

“But any dilution of that by a significant development taking place offshore puts that in jeopardy.”


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