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ARM to 'take seriously' any Intel plan to make chips for rivals

An employee uses a remote control to demonstrate a Hewlett-Packard Co. Dreamscreen digital photo frame, which contains an ARM microprocessor chip, at the ARM Holdings Plc headquarters in Cambridge, U.K., on Wednesday, March 16, 2011.

Chris Ratcliffe/Bloomberg

British chip designer ARM Holdings PLC , which licences its chip technology to other makers, will take any plan by Intel Corp. to make chips for rivals "very seriously", a top executive said on Monday.

Intel said last week it would consider making chips for rivals, a move that might help it gain bigger access to the mobile device realm and pose a threat to ARM's current dominance in the tablet and smart phones sector.

"It's important that Intel makes a change in their business model. Intel has never done this before, so we have to take it very seriously," ARM's marketing executive vice-president Ian Drew told Reuters in an interview ahead of the Computex computer show in Taipei.

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Intel views its massive lead in manufacturing know-how as a key asset and opening its factories up to competitors would be a major shift for the industry.

Intel noted that it would be happy to produce chip cores based on its own architecture for other companies but that allowing rival architectures to be manufactured in its plants would be "a tough decision".

Mr. Drew said he believes ARM's business model has less restrictions than Intel's, and the company is confident in keeping its current market shares of 80 per cent in tablets and 90 per cent in smart phones.

ARM has been far ahead of Intel in the red-hot mobile arena and its chips are the industry standard for Apple's mobile gadgets and other devices running Google's Android operating system.

ARM's power-sipping architecture is used in processors produced by Qualcomm , Texas Instruments , Nvidia and Samsung Electronics .

Underscoring ARM's dominance, Microsoft , previously faithful to Intel's x86 chip architecture, said in January it would configure its Windows software for ARM chips, in recognition that tablets were eroding growth in its PC stronghold.

ARM's president Tudor Brown told a media conference earlier on Monday that the company will still focus on mobile devices.

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"Traditional PC chips only accounted for 6 per cent of our whole PC chip shipments of 6 billion units last year," Mr. Brown said.

"The contribution will still be less than 10 per cent in the future."

Mr. Brown also said the company aims to lift its market share in the tablet sector to 15 per cent by the end of 2011 and over 50 per cent in 2015 from 10 per cent now.

ARM currently has over 200 licensing partners, including seven in China and 15 in Taiwan.

The British company has over 100 staff in Asia, including Japan but excluding India, and plans to add around 20 more within the next year, according to Mr. Drew.

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