Sharp headline: Intel of embedded!
"Intel had a 90 percent share of PCs, of which 100 million were sold last year with 15 percent growth expected.
ARM has a similar share of the digital mobile phone market, which is seen as growing 45 percent a year from last year's 162 million sales. It gets 10 to 15 cents in royalties per chip. "They own a key piece of the (technology) infrastructure, like Cisco, Intel or Microsoft," Woolcock said."
(I personally like more this: Rambus for embedded, cos ARM is fabless IP-co.)
zdnet.co.uk
ARM joins establishment in FTSE 100
Tue, 21 Dec 1999 12:22:35 GMT Reuters
Chipmaker shares have risen dramatically as consolidates hold on mobile phone market
ARM (quote: ARM), just another upstart technology company a mere two years ago, joined the revered ranks of British blue-chip companies on Monday in the FTSE 100 index, and its shares promptly set a new record high.
With fellow computing newcomer CMG, ARM Holdings -- which designs tiny chips that run most of the world's cellphones -- will bolster the still thin ranks of technology companies in the index, which amends its make-up once a quarter.
Pension funds and institutions eager to boost weightings in technology stocks by backing a proven winner piled into ARM on Friday, when it rose 19 percent, and again on Monday.
Seven technology stocks, including software maker Sage Group (quote: SGE), now dot the blue-chip index, where they were barely known a year ago.
At 1325 GMT, stock in what many see as a new Intel was on offer at 4,023p, down from a new record of 4,485p but still 53 up on the day. With a market capitalisation of over £8bn, it climbed straight into the top half of the index, elbowing aside national icons such as British Airways.
Even in the giddy world of high-tech hype and Internet fever, its rise has been breathtaking. Two years ago at the launch a share would have cost the price of a pint of beer, at just over two pounds. If you sold it now -- though few holders seem to want to -- you could dine out at a fancy restaurant on the proceeds.
ARM, star of Cambridge's high-tech industrial parks which have been nicknamed Silicon Fen after the lowland countryside, is now trading at a giddy 550 times prospective earnings for 2000, but even that seems not to deter investors.
ARM, which started designing and licensing tiny low-powered chips for mobile devices while the United States was fixated with products for desktop computers, has backed the right horse. Nomura analyst Keith Woolcock pointed out that US chip designer Intel had a 90 percent share of PCs, of which 100 million were sold last year with 15 percent growth expected.
ARM has a similar share of the digital mobile phone market, which is seen as growing 45 percent a year from last year's 162 million sales. It gets 10 to 15 cents in royalties per chip. "They own a key piece of the (technology) infrastructure, like Cisco, Intel or Microsoft," Woolcock said.
Merrill Lynch last week put a price target of 54 pounds a share on the profit-making darling of the high-tech sector. Goldman Sachs is more conservative, at 38 pounds.
Rather than making the chips, ARM licenses its know-how to almost 40 customers who include many big names in electronics.
MIPS Technology and Hitachi are rivals in microchip making but ARM has its grip on the mobile phone sector -- which is expected to explode as phones and new portable devices get hooked up to the Internet.
Woolcock said ARM's strength was it showed no signs of complacency. More than a quarter of profits are ploughed back into research and development.
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