ARM: Tudor Brown says chip-maker should remain independent

ARM assembly

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Getty Images / ARM

Tudor Brown, the former president of ARM, warned of the risks of allowing the UK-based chip designer to sell to another semiconductor company.

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

The Nikkei reported that Taiwanese chip maker TSMC also expressed interest.

Softbank declined to comment.

Mr. Brown has been involved with ARM for 29 years.

He co-founded the Cambridge-based company in 1983 and served as 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 £ 24.3 billion deal.

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Tudor Brown

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Tudor Brown says it would be “reasonable” to avoid selling ARM to another company involved in chip design or manufacturing

“I have always believed that Softbank’s investment and focus on growth was reckless, and I think Softbank is coming to accept that,” Brown told the BBC.

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

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

ARM creates computer chip designs that others customize according to their own purposes. It also develops instruction sets that define how the software controls processors.

Almost all modern cell phones and smart home gadgets are powered by a chip that is based on one or both of these innovations.

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

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

Nvidia is among many companies that pay for a license to use ARM technologies in their chips and there is concern that the acquisition of the company creates a conflict of interest.

TSMC is the largest chip maker in the world – 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 change the level playing field, making it much more difficult for companies wishing to use other foundries – such as UMC, SMIC or Global – or companies with their own manufacturing facilities such as Samsung and Fujitsu”, he explained.

“Almost whatever happens, if someone from within the industry buys it, it means the balance is off balance.”

US sanctions

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

The BBC reported Monday that Hermann Hauser had said 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 is sold to Nvidia, many of its existing licensees will try to adopt a workaround.

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

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

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

“Problem is, I’m 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.

This could limit the ability of other governments to involve him in diplomatic confrontations.

Last year, there was a furor when ARM briefly suspended business with Huawei while examining how far it had been affected by the US sanctions.

Despite having offices in the United States, he ultimately decided to return to let the Chinese company use its designs to make smartphone chips and 5G equipment.

With the Trump administration now targeting a wider range of Chinese companies, a danger would be that companies find it too risky to continue to base their chips on ARM technologies. This may encourage them to switch to a rival platform called Risc-V, which is open source but currently less developed.

“At the moment, ARM’s intellectual property is predominantly British,” explained Brown.

“This is important because I believe it means that ARM is not subject to United States export laws.

“But any dilution of that due to significant offshore development puts it in jeopardy.”

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