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This week is ARM's 25th anniversary. It is actually on Friday, the 27th, but since that is the Friday after Thanksgiving I figured publishing this blog on the precise day was probably less important than picking a day that people might actually see it.
ARM is the leading microprocessor vendor in the world, by unit shipments. In 2014 ARM announced that they had shipped over 50 billion processors, it must be a lot more by now. Without exception, every mobile phone contains an ARM® processor, probably several if you look inside the Bluetooth and WiFi chips, and there are around 1.5B phones shipped each year. Most tablets are ARM-powered too.
I have a long history with ARM, although I never worked for them. Acorn (the A in ARM originally stood for Acorn, a British personal computer manufacturer) decided in about 1983 to design their own RISC processor for their next-generation product instead of continuing to use the 6502. They also decided to use VLSI Technology, where I worked at the time, to manufacture it, because we had the best design tools.
Back then there was no real EDA industry, design tools were captive inside semiconductor vendors. If you wanted to do a design with VLSI Technology then you did it with VLSI's tools. This was also way before VLSI had offices in the UK or even Europe. So the tools needed to be installed, but we had no local application engineers, so I was the guy that got sent, presumably because I was British, even though I was a programmer, not an AE. Anyway, as a result, I installed the design tools on which the first ARM processor was designed. The lead designer who would use them was Jamie Urquhart, who eventually went on to be CEO of ARM for a time.
Acorn fell on hard times as the PC market consolidated, and it was acquired by Olivetti (yes, the typewriter people from Italy, although by then they were in electronics, too). In fact Lucio Lanza, a famous VC who is one of the only people still doing EDA investments, designed microprocessors for them before he moved to the US. In a way, he was the key player getting them into electronics. VLSI Technology played a part there, too, setting up an internal design center in Ivrea (Olivetti-town).
In 1989, Apple decided to build the Newton, the first personal digital assistant (PDA). The back story is actually much more complicated than this. Larry Tesler of Apple looked around the various processors that they might use and decided that the ARM processor had the best MIPS per watt, which was really important since battery life was critical (the Newton wouldn’t be any use at all if its battery only lasted an hour), but the computation needs to do handwriting recognition and other things were significant. However, they also decided they couldn’t use it if the design team and compiler teams were all buried inside a minor division of Olivetti.
So ARM was spun out as a joint venture between Acorn/Olivetti, Apple, and VLSI Technology. I had to fly from France, where I was by then living, to a mysterious meeting in Cambridge in a hotel. I wasn’t even allowed to know what it was about until I got there. VLSI provided all the design tools that the nascent company needed in return for some equity, 5 or 10% I think, and also built the silicon. Remember, at this stage the idea was not to license the ARM processor widely, but rather to sit on the rocket-ship of the Newton, and both ARM and VLSI Technology would get rich as Apple created an explosively growing PDA industry. John Sculley, Apple’s CEO, was publicly saying the market for PDAs and content would reach $3 trillion. If you look at the smartphone industry, I suppose you could claim he was correct, just 20 years too early. VLSI would manufacture and sell ARM chips (this was just before a processor was small enough to be embedded) to other companies for other products and would pay ARM a royalty.
Well, we all know how the Newton story played out. The same story was repeated with other products that ARM was designed into. As Tudor Brown said when he stepped down as President of ARM and left the company:
All of ARM's early products failed commercially. There's a long list of them: the Acorn machine, the Apple Newton, the 3DO multi-player. There were a whole bunch of things like that.
Back then, microprocessors were not licensed except in extremely controlled ways. They would be second-sourced since large customers didn’t want to depend on a single semiconductor supplier in case their fab burned down or some other disaster interrupted supply. For instance, AMD originally entered the x86 business as a second source to Intel. VLSI was a second source to the Hitachi H8. The second source could also do its own business with the processor but it was never expected to be significant. Anybody serious would go to the first source where all the expertise was.
Once it was clear the Newton was not going to be a success, VLSI continued trying to sell ARM and ARM-based designs to other customers. But nobody had heard of ARM and they were very reluctant to use what was then a largely untried microprocessor. There was too much technical risk.
Meanwhile, ARM had to work out how to make some money other than selling through VLSI. I have no idea if it was deliberate but just like IBM thought nothing of letting Microsoft license DOS to others (who would license it?), ARM had complete freedom to do this. Under Robin Saxby (now brave, brave Sir Robin) they licensed a dozen semiconductor vendors. Suddenly for VLSI Technology, nobody worried about technical risk any more, they had heard of ARM and they wanted it. But VLSI also then had a dozen competitors with almost the same product.
Around this time, cell-phones were transitioning from using 8-bit microprocessors for their control processors to delivering more compute power. They largely skipped 16 bit and so the ARM7 (or more accurately the ARM7TDMI, designed by a team led by Simon Segars, the current CEO) was designed into a good percentage of cell-phones. And luckily cell-phones did promptly take off like the Newton rocket was supposed to have done.
VLSI’s cell-phone business exploded too, with Ericsson representing almost 40% of VLSI’s total business at one point, almost all of it whatever was the current version GSM baseband chipset. Ironically, Ericsson, at that time, didn’t use ARM, they used their own implementation of the Z80.
When Compass was spun out from VLSI Technology, we inherited the ARM deal, namely providing everything ARM needed for free. Of course VLSI didn’t see fit to give us the ARM equity that was the payment for this, or Compass would have ended up being wildly profitable when ARM finally went public. It fell to me to renegotiate the terms (with Tudor Brown, as it happens, who was the engineering VP at that time). It was difficult for both sides to arrive at some sort of agreement. ARM, not unreasonably, expected the price to continue to be $0 (which was what they had in their budget) and Compass wanted the deal to be on arms-length(!) commercial terms. It was an over-constrained problem and Compass never got anything like the money it should have done from such a large and important customer.
I eventually left Compass (I would return later as CEO) and ended up back in VLSI, where one of my responsibilities was re-negotiating the VLSI contract with ARM for future microprocessors. It is surprising to realize that even by 1996 ARM was still not fully accepted. VLSI Technology had to pay money, along with other semiconductor licensees, to create an operating system club so that ARM, in turn, could use the funds to pay Wind River, Green Hills, and others to port their real-time operating systems to the ARM processor. Today they could probably charge for the privilege.
Since those early days when the headquarters was a converted barn, ARM has gone from a tiny near-failure of a company to be far and away the largest player in the IP market. Happy Birthday, ARM. I wonder what an ARM processor will be like in another 25 years.