Benefits Of Artisan Acquisition ‘Coming Through’, Says ARM CEO

After all Artisan, in the 12 months before the purchase by ARM, had revenues of $83 million, net profits of $17 million and $140 million of cash.

So it seemed like a good idea to ask ARM CEO Warren East if buying Artisan is turning out to be a good thing.

“The benefits are coming through,” said East, “one of the primary benefits is that it’s allowing us to build better processors. That was not obvious in 2004. Having control of the physical IP is optimising our microprocessors”

In the ARM Q4 accounts it states that a Cortex-A9 processor optimised with ARM’s IP running at 2GHz while consuming 2W of power demonstrates the synergistic benefit of having both processor and physical IP within ARM.

Asked how much the effect of having the physical IP contributed to the power efficiency of this Cortex-A9 processor, East replied: “About 40%”.

But improving processors is not what ARM’s physical IP business is all about.

“ARM looks on the business as a stand-alone business,” said east, “it’s a growth business in its own right. It’s been though a difficult two years but in the fourth quarter we had record royalties from the Physcal IP division.”

In Q409 PIPD underlying royalties (not including back royalties) were $10.3 million underlying royalties for PIPD were up 8% year-on-year to a record high.

East pointed out that there can be a four year time-lag from licensing to royalty.

PIPD royalties come mostly from foundries. ARM is getting revenues from wafer shipments across nine different advanced processes at 65nm and better, which collectively contribute over a tenth of the physical IP royalty stream.