Opinion: As ARM enjoys a Japanese embrace, the lessons it can teach UK tech firms

When the 12 founding engineers of chip designer ARM Holdings met in a 14th century barn near Cambridge in 1991 to welcome their new CEO, (now Sir) Robin Saxby, he asked them a brutal question: “Should we strike out for something, or just be in the hand-to-mouth chip design consulting business?”

With Saxby’s enthusiasm and the founding engineers’ belief in their technology, the team decided they would aim to become a global standard. They set a target to embed ARM designs into 100m chips by the year 2000. It was an ambitious goal for a tiny company with only £1.32m of investment from its then-struggling backers Acorn, Apple, and VSLI. At the time, many said it was no more than a pipe dream.

But this week, ARM agreed a US$32 billion sale to Japan’s Softbank. ARM’s chip designs are embedded in more than 95% of the world’s mobile phones, as well as tablets, servers, and many other types of smart devices. Last year, ARM’s designs went into some 15 billion semi-conductor chips. An incredible feat from an inauspicious start. So what lessons does ARM’s success have for other budding British technology companies?

The first is: don’t try to do everything yourself. Instead, specialise in the activities where you have a distinctive advantage. In ARM’s case, that was designing capable, reliable chips that used little power and could be manufactured efficiently in volume at low cost.

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Reproduced courtesy of the University of Cambridge
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