What is ARM?

Everyone has heard of the big, bad Intel. Likewise, Silicon Valley in California is synonymous with cutting edge computer chips. But will the future of computing be owned by a much smaller company on the other side of the pond, based in leafy Cambridge, England.
 
ARM Holdings currently has annual revenues around $500 million. Intel is on track for $40 billion this year, making it roughly 80 times larger. That seems like a huge mismatch, but it's only part of the picture. The key difference between ARM and Intel is that for the most part, ARM doesn't make processors - it merely licences the intellectual property required to make ARM - compatible chips.

The impact of this is twofold. Firstly, it means ARM doesn't have a vast production infrastructure like Intel, with it's billion - dollar chip fabs. That explains how there can be billions of ARM chips produced every year, while ARM itself remains relatively small. The other major consequence of ARM's fabless status is that instead of one company making ARM processors, there are many. Everyone from Apple to Samsung, Texas Instruments and NEC makes ARM processors, and that means competiton and innovation. Thus instead of merely competing with AMD as it does in laptops and desktops, if Intel is to crack the smartphone market it must take on as many as 10 to 15 companies.

At the same time, the latest ARM designs are edging closer to Intel territory. The new ARM A9 core supports out-of-order instruction execution. That's traditionally a high - performance feature and allows for high-per clock performance. Likewise, the first multi-core ARM processors are appearing. Put it all together and you have the Intel juggernaut converging with the mass of ARM manufactures.

The inevitable impact will be spectacular.