p>Semiconductor design firm ARM is took a major leap
into the embedded microprocessor space by acquiring Artisan Components ,
producer of embedded memory, standard cell, input/output, analog and mixed-signal components.
The estimated $913 million deal will extend ARM’s base of offerings to
include a roster of digital, analog and mixed-signal components for building
systems-on-chip (SoC)
SoCs are growing in popularity because they hold all of the necessary
hardware and electronic circuitry for a complete system. The building blocks
are used widely in cameras, cellular phones, set-top boxes and PDAs. A
basic SoC will include on-chip memory (RAM and ROM), the microprocessor,
peripheral interfaces, I/O logic control, data converters and other
components that comprise a complete computer system. Applications also
include uses in nanotechnology and medical technology.
Jerry Ardizzone, ARM president of U.S. operations, told
internetnews.com that his company’s IP portfolio had been somewhat limited
to microprocessors. But with Artisan, ARM can offer one-stop design shopping
for its 130 semiconductor manufacturing partners and Artisan’s 2,000
customers in semiconductor design and manufacturing, he said.
“Generally the embedded market is growing, especially if you look at the
shift from 8-bit to 16-bit to 32-bit market,” Ardizzone said. “You will
start to see many 8-bit chips move to 32-bit, and that provides an
opportunity for us since we are strongest in the 32-bit space. Wireless
continues to be a very strong category for us. If you walk into any electronics retailer, there are new
opportunities for us in portable, handheld and wireless devices, as well as
automotive, satellite, cable boxes, personal video recorders, and HDTV.”
Ardizzone said ARM and Artisan have complementary IP, sales channels and
business models, and they share client lists, including Intel, LSI Logic, Sun
Microsystems, Texas Instruments and QUALCOMM. Ardizzone said ARM will market
its combined product line to an entire spectrum of customers, including ones
working in automotive, consumer, networking, printing and imaging and storage.
In some cases, the marketing will be selective, as in the case of ARM’s 3D graphic
accelerators, which are used more in some markets than in others.
“There are also many companies building SoCs that are not as big as TI or
QUALCOMM that are matching licensable blocks in ASSPs [Application Specific
Standard Products],” Ardizzone said. “They have the choice of making their
own designs versus buying their chip designs. And we think if we have
compelling solutions for these manufacturers then they will be more
interested.”
The acquisition has the blessing of both company’s executive boards, and
plans are in the works to align the leadership. ARM said CEO Warren East
would continue to lead the combined companies, with Lucio Lanza, chairman of
Artisan, and Mark Templeton, president and CEO of Artisan, joining the board
of directors of ARM as a non-executive director and an executive director,
respectively, on completion of the transaction.
Immediately following the acquisition, Ardizzone said ARM and Artisan
would keep their respective business units intact and continue to operate
their satellite offices. If anything, he said, ARM might increase its staff
of 140 people to well over 200 in the Silicon Valley, so it can be closer to
the companies it serves.
Just in case the government or shareholders don’t see eye to eye on the
acquisition, ARM has agreed to pay a break-up fee to Artisan of
approximately $18 million. Artisan, sensing the same, has also agreed to pay
a break-up fee to ARM of approximately $31 million or $18 million, depending
on if the deal breaks down and how it is played out.
The companies said the paperwork should clear in the fourth quarter of
2004 pending shareholder and U.S. and U.K. regulatory approval.
