2006 Corporate Innovation Recognition

ARM Limited, headquartered in Cambridge, England, was formed with technology from Acorn Computers Limited and investments from Apple and VLSI Technology, Inc. Working from a business model that fostered intellectual property (IP) licensing and design reuse, ARM grew from a 12-person joint-venture spin-off in 1990 to the market leader in the 32-bit embedded RISC processor marketplace. Its processors are found in a wide variety of popular consumer electronics products including mobile telephones, digital cameras, digital music players, DSL modems and personal digital assistants (PDAs).

The IP licensing model that drove this success calls for business partners to purchase a “right to use” license up-front and then pay a per-use royalty. The up-front license fee created a strong cash flow even as it shared the cost of developing and implementing new processors and software support tools across a wide customer base.  

In developing its unique business model, ARM led the way in making design reuse a practical and achievable reality. It partners with major semiconductor companies worldwide who, in exchange for the license and royalty fees, manufacture their own designs based on one or more ARM processors. This model has reduced investment in the semiconductor industry substantially by eliminating duplicate embedded processor design activities.

ARM's business model has been fostered by its ability to develop technology that keeps its processors in the forefront of software support, on-chip debugging, chip buses and interconnect technology, code density and power efficiency.