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Corporate Overview
Corporate Objectives
Organizational Structure
Business Model
ARM Ecosystem
Corporate Overview
ARM Holdings is the world's leading semiconductor intellectual property (IP) supplier and as
such is at the heart of the development of digital electronic products. The continuing evolution
of electronic devices becoming more digital and more intelligent has escalated to the extent
that the use of IP is now providing the technology foundation for nearly everything electronic
in the world today.
The ARM business model involves the designing and licensing of IP rather than the manufacturing
and selling of actual semiconductor chips. It licences its IP to a network of 'Partners',
which includes the world's leading semiconductor and systems companies. These Partners
utilise ARM's IP designs to create and manufacture system-on-chip designs, paying ARM a
license fee for the original IP and a royalty on every chip or wafer produced. In order to maximise
the range of users of ARM products, the Company provides a range of tools, software
and systems IP to facilitate adoption and incorporation.
With ARM's diversity of IP and broad range of performance features, the world's leading
Original Equipment Manufacturers (OEMs) use ARM's IP in a wide variety of applications ranging
from mobile handsets and digital set top boxes to car braking systems and network routers.
The 5 key market segments the Company addresses are: 1) Embedded Solutions, 2) Enterprise
Solutions, 3) Home Solutions, 4) Mobile Solutions, and 5) Emerging Applications. Today ARM
technology is used in more than 90% of the world’s mobile handsets and ARM is continually
growing in usage in the non-mobile markets as well.
To learn more about ARM's target market segment please visit www.arm.com/markets
    
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Corporate Objectives
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Revenue growth that exceeds that of the wider semiconductor industry.
- Medium-term dollar revenue growth in the
region of 15% per annum.
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Growth of costs at a slower rate than revenue.
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Sustained operating margins above 30% trending to 40% in the medium term.
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Long-term financially-disciplined approach to balance sheet management
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Organizational Structure
COMMERCIAL
Worldwide Sales: Worldwide Sales: Single global sales force responsible for
the ’push‘ sale of all product lines to direct customers (e.g. Texas Instruments)
through account management and use of technical specialists from each of
the divisions and BU's.
Segment Marketing: Global organisation responsible for creating pull for ARM
products through original equipment manufactures (e.g. Nokia) and other
value chain influences (e.g. network operators)
ENGINEERING AND MARKETING (% OF REVENUE [INCLUDES ROYALTIES])
Processor Division (~65%) —
Microprocessor core which typically acts as the brains and the decision
maker within the system-on-chip (SoC).
Physical IP Division (~20%) — The building blocks
necessary for translation of a circuit design into actual silicon.
System Design Division — Combination of the Development
Systems (~10%) which provide tools and models used to
create and debug software and SoC designs and Fabric IP (*)
which develop System IP such as buses and controllers that
connect functional blocks (microprocessor and DSP blocks)
together within an SoC.
Media Processing Division (*) — Division created to support
the media (such audio, video, and graphics) needs of our customers
in the future. The division is the combination of our
Data Engines Business Unit (configurable DSP IP used for
data intensive algorithms); Embedded Software Business
Unit (middleware software such as power management,
security, and java acceleration which is typically linked to the
microprocessor core) and Graphic Business Unit (system IP
that creates increased 2D and 3D graphics richness and
system efficiency for applications such as gaming).
Services Division (~5%) — Support and maintenance of ARM
products along with training and consulting services.
* Revenue contribution is negligible and therefore not broken
out as a % of revenue
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Business Model
ARM license its IP to a direct customer (ARM Partner) at which
time ARM receives a license fee. For Processor IP and Physical IP
the licensee fee is typically in the range of a few million dollars
dependant on the type of license sold. The customer will then
design and manufacturer a solution based on this IP which takes
on average between 3 to 4 years to complete. At this point ARM's
direct customer will sell their product to their direct customer and
ARM will receive a royalty for every product sold that contains
ARM IP. For the majority of ARM’s licenses, the customer is able
to reuse the same license in new chip designs thus creating new
royalty opportunities from the same license previously sold.
Royalties are received one quarter in arrears and are typically in
the range of 1-3% of the average selling price (ASP) of the semiconductor
for processors or 1.5% of the ASP of the completed
wafer for Physical IP.
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ARM Ecosystem
ARM has built up an extensive community of 3rd party technology providers and designers, called the ARM Connected Community.
This is designed to facilitate the networking opportunities for the member companies in an effort to increase design win opportunities
and shorten the time-to-market of complete ARM Powered® solutions. There are currently more than 300 companies within the
Community spanning the semiconductor supply chain. This Community not only serves to enable the uptake of ARM technology,
but also as an extensive competitive advantage and barrier to entry for IP companies providing technologies in the same areas
as ARM.
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