ARM boss warns off potential buyers

ARM chief Warren East has warned potential suitors that buying his company to deprive others of access to its technology would be an expensive mistake.

The British chip designer has been the subject of takeover speculation in recent months. Apple – which uses ARM designs in products such as the iPhone and iPad – was reportedly considering a bid for the company earlier this year.

However, in an exclusive interview with PC Pro, East warns that any attempt to buy ARM as a competitive weapon could backfire.

It’s a very expensive way of causing your competitors some disruption

“It’s one of those things that’s always there as a theoretical possibility,” East replied when asked whether he feared the company would be subject to a takeover bid. “You know, tornadoes could strike London at some stage.

“We believe that the business model of ARM is tailored around ARM being independent, and that’s what creates most value for the semiconductor industry and therefore for our shareholders.

“We are a public company and therefore subject to same risks of being taken over as anybody else and we just have to live with that, just as Londoners have to live with the risk of a tornado at some stage.”

Multi-billion buy

ARM, which is worth around £4.3 billion, would be an affordable target for several of the industry’s giants, including Apple and Microsoft – which last week signed a deal to license the full ARM architecture for the first time.

Yet, East doesn’t believe buying ARM would be a good use of their shareholders’ money. “There are all sorts of reasons why that doesn’t make as much sense as it appears to when you first consider it,” he said. “It’s a very expensive way of causing your competitors some disruption, some serious disruption, but it is nothing more than disruption.”

“These companies are all highly resourced companies and they’ll find ways of dealing with it.

“If people have access to ARM licences then they can build devices around those microprocessors for many years and buy themselves plenty of time to find alternatives,” East added. “Yes, it would be inconvenient for them to do that, but when faced with no other alternative, I’m sure they’d find some way of doing it.”