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ARM is Europe’s most valuable semiconductor company, outstripping Infineon, STMicroelectronics and NXP by a long chalk.
At IFS2012, Future Horizons’ CTO, Mike Bryant, pointed out that ARM’s market cap is now $12 billion.
Next largest market cap is NXP at $5.8 billion and rising quite steadily.
Third largest market cap is STMicroelectronics at $4.8 billion and falling quite steadily.
The market cap valuation is in dramatic contrast with the companies’ sales – running at $4 billion each at Infineon and NXP, at $8 billion at ST and at $750 million at ARM.
Future Horizons also looked at the contribution of these companies to European economies based, among other criteria, on where they do their work.
ST’s contribution was valued at $5.8 billion; Infineon’s at $3 billion; NXP’s at $2.6 billion; ARM’s at $700 million.
However Bryant adds: “Of course the ARM ecosystem is huge, possibly creating more jobs than the whole European semiconductor industry, since it operates one and two levels up on the wealth creation triangle.”
Because, [anonymous] ARM’s partners hold a lot of ARM shares and it is in their collective interest to keep the price high to deter predators. And if there were to be a predator, the partners would push the price higher to deter the predator – so that’s all in the share price. Plus, of course, ARM does have potential as the ‘architecture for the digital age’ which, apparently, Warren Buffett thinks Intel doesn’t.
could you tell the reason why arm has a high cap & low sales in comparison to its competitors,what are the reasons for such high market capitalisation.
With such a high percentage of so many microprocessor markets, ARM’s main opportunity for growth has to be by entering new markets. As Scott said M&A isn’t easy but without it Broadcom would still be a small player. Providing they do it well, as they generally have done so far, then ARM can use their high valuation to acquire some good companies. Alternatively poach some good people from Icera and Picochip and get into the LTE market that way.
BTW the A15 isn’t bad, and combined with the A7 in their big-little concept it’s highly innovative. It’s just not the server processor ARM tried to tout it as early on.
Ah Yes, Mike, and what was it Scott McG said about M&A in the semiconductor sector?
An excellent point Djonne, the A15 is a disappointment. But ARM is a prodigious producer of good cores and one hopes they can do something better very soon.
I’m not sure ARM is in such a good shape right now.
They seem to have some troubles on their next gen top of the line, the cortex A15, about which we don’t hear a lot, almost one year after Qualcomm’s Krait introduction and with Intel threat growing…
A large proportion of ARM’s products are based on purchasing other companies – Artisan, Allant, Falanx, etc. With more money they could consider some larger purchases.
It’s a very interesting idea,Mike, but so far ARM doesn’t seem to have lacked the money to do what it wants to do. My feeling is that ARM does best producing widely licenseable parts. Taking money from customers up-front might turn it into more of a bespoke custom house.
I wonder if ARM will do an ASML and ‘offer’ its key customers minority shares in the company for a significant sum plus an investment in R&D.
Would bring a lot of money into the company and allow ARM to expand into other areas. Imagine the demand if ARM could offer licences for
an LTE core, advanced audio and other high value items.
Thanks Mark, I have changed the numbers in the post accordingly.
ARM’s market cap is now over $12 billion. Total revenue last year was just short of £500 million (not $500 million).
Not that short a time [Anonymous] Intel bought the part of DEC with the ARM archtecture licence in 1998 and kept it – rebranding ARM as X-Scale – until 2006 when it was sold on to Marvell. Marvell did a much better job with it than Intel. For starters, Marvell put the ARM product line on advanced processes – which Intel never did.
Dont forget that Intel did have an ARM licence for a short time when they aquired Digital, they effectively gave it to Marvell when they sold the StrongARM design team.
I didn’t know that, Anonymously, but even before the first ARM chip was designed, Acorn Computer asked Intel for a license to use the 80286 and Intel said no, which prompted the Sophie Wilson/Steve Furber design effort. We’ve seen what happened when x86 dominated the PC sector – high prices of PCs for 30 years. No one wants to see that repeated in the mobile sector – or anywhere else for that matter.
In the good old days in ARMs beginings they approched Intel and offered there architecture for sale and was declined and was told that there architecture was too simple. Now a few years on and ARM are kicking Intel in the arse in all low power segments. Had Intel visioned then what is happening now they would have been the dominant proprieter now
If ARM was bought by Apple or Samsung [Anonymous] most of its value would disappear. ARM’s value to the world is that it stops Intel from being a single-company source of a dominant proprietary microprocessor architecture. The world doesn’t want to have a dominant proprietary processor architecture ever again.
I wonder how much of that value depends on the hope that one day Apple or Samsung will decide
to buy them out?