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Beijing, September 28 (Xinhua) there is an interesting strange phenomenon in the modern technology world: there is a company that does not produce anything, but it dominates the chip world. Its technology is stored in your phone, in your TV, in your car, even in your laptop and in the data center that drives it all.

It's ARM, a chip design company that's been through a lot in the past few years. ARM mainly designs instruction sets for modern chips, and customers include Qualcomm, Apple and Samsung, whose chips are based on ARM architecture. In terms of the business model, ARM authorizes the instruction set to these companies and collects royalties from them. With ARM's architecture, these companies can produce a variety of custom chips according to their own needs. This model of ARM has been a great success.

ARM CEO Rene Haas (Rene Haas) gave an interview to foreign media on Tuesday to discuss the company's business model, business relationships with Apple and other customers, sales, listing and other topics.

▲ ARM CEO Haas

ARM chips everywhere Haas explained that ARM is not a well-known company, the outside world does not know us very well, but we think we are very important. First of all, ARM is in the semiconductor value chain of the semiconductor world. Basically, you can find ARM technology in almost any type of semiconductor and / or original equipment manufacturer (OEM) product. Our technology covers smartphones, laptops and smart TVs. If you look around my desk, there may be ARM processors everywhere. We don't actually produce anything. We design for our products, which is intellectual property. We do design, not make a chip, and we license that design to those who will make the final product. Our most famous main product is the microprocessor, that is, CPU, which is the brain of almost all electronic devices.

Instead of making chips, we license this brain to other people. As a result, ARM chips are everywhere. According to last quarter's data, all semiconductor companies and OEMs around the world manufactured and shipped 7.4 billion chips with built-in ARM CPU, GPU or other technologies. This is a huge number. So we're in the semiconductor value chain, but we don't make anything. We do designs, and most of them are microprocessors.

'in the electronics industry, it may be easier to say who is not our customer, 'Mr. Haas said. Almost all the companies you can think of are our customers. TSMC, Samsung and GE Core are the physical enterprises that produce chips. Intel, AMD, Nvidia, Qualcomm, Amazon, Microsoft and Google are also our customers. Then, in other parts of the world, our customers have Alibaba, Tencent and Byte Jump. Almost every company is our customer.

▲ Haas

Our business model has two components. We charge a pre-paid license fee, which is the fee paid to us by our partners to use the technology. This gives them the right to use our technology for design. If these designs eventually go into production and become the final product, we will charge a royalty per unit according to some mathematical calculations related to the contract. Therefore, we have two sources of income: one is license income, and the other is royalty income.

Consumers buy devices that include Samsung, Qualcomm and Apple chips, but consumers don't have to pay ARM, they pay for them. Qualcomm, for example, reports to ARM how many chips it has sold and then pays ARM based on pre-agreed usage rates.

The importance of the principle of neutrality Haas said ARM will try to remain neutral. As we all know, we are known as the "Switzerland of the electronics industry" (Switzerland maintains a neutral policy), which is a good analogy. We don't try to pick winners and get involved in the various sub-ecosystems of the ecosystem. If you start at the bottom of the semiconductor chain, you will encounter Grid Core, Samsung, TSMC, Intel, all the people who make chips, and you have to work with all of them. We must ensure that our technology is built on every semiconductor process in the world, which requires the investment of all these partners. Then, further up are Android, Linux, Windows, and all the major operating systems we support, we have to make sure we're among them.

Many chip companies rely on TSMC, so how much does ARM rely on TSMC? Haas said that we work closely with TSMC. All contract factories are very important to us and the company will remain neutral.

Why did you change your mind to go public? Before Haas became ARM CEO, his predecessor was staunchly opposed to going public because once the company went public, it would be under pressure to increase revenue, which would put ARM's neutral, fair model in jeopardy because the company might make special deals to boost revenue.

Haas responded that when the Nvidia acquisition basically broke down at the end of last year, we made a change and announced our decision to go public. When I took office in mid-February and ARM's fiscal year ended in March, we were finally able to talk about our financial performance, which we hadn't talked about for a while. When Nvidia was looking for an acquisition, we were very quiet. When we reported revenue for the last fiscal year, our revenue was well over $2 billion. We have generated $2.6 billion in revenue, which has never exceeded $2 billion in the past. Our operating margin is close to 40%, but people think we're losing money because we don't disclose more. This quarter, you'll find that these figures are even higher than last year: operating margins of more than 50%, revenue of $700 million, and royalties of $450 million.

Haas has said it plans to go public in March 2023. As time approaches, will ARM be able to achieve this goal? 'We 're in the process right now, and I can't say too much, 'Mr. Haas said.

Will ARM obsolete x86 architecture? Asked if the ARM and RISC-V architectures would eliminate the old x86 architecture, Haas said it was hard to tell. X86 has been around for a long time and has a very large installation base. I certainly don't want to do anything to denigrate what they do. I think the challenge with x86 is that it only comes from two companies (Intel and AMD). This in itself is a limiting factor that limits how far it can go.

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