Demand for smarter chips is creating an opportunity for ARM’s technology
To meet the demand for smarter chips in consumer electronics ARM customers are using our technology in a broadening range of end-markets. ARM will introduce three new processors in 2010 and increasing end-market demand, combined with the latest ARM designs, has resulted in a strong licensing opportunity pipeline.
Mobile phones continue to be a driver of ARM’s royalty revenues as smartphones become smarter and more capable, and will become a greater proportion of overall handset shipments. Even voice-only phones are becoming smarter as increased connectivity and multimedia capability becomes standard across all phones.
An increasing proportion of ARM-based chips are going into non-mobile devices. Already leading HDD manufacturers have ARM-based product lines and are increasing their use of ARM technology. As digital TVs become internet connected they are benefiting from the ecosystem of software already available for ARM. Our microcontroller market share is growing, with many leading microcontroller manufacturers announcing new ARM-based product lines.
ARM is investing in additional technologies that are suitable for our business model, of an upfront licence fee and an on-going royalty stream, such as physical IP and graphics processors. During 2010 ARM will continue to develop the roadmap of physical IP components. We expect leading customers to start commercial production of 32nm chips in 2010. ARM will also start licensing our new graphics processor and we expect increasing shipments of chips based on ARM’s graphics technology in smartphones, digital TVs and other consumer electronic applications.