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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (12267)	12/7/1999 9:13:00 PM
From: gdichaz	Read Replies (2) \| Respond to of 54805

LindyBill: In order to help get started on your call for kings, here is a candidate - ARMHY -viz: ARM Holdings (Advanced RISC Machines) plc. ARMHY To: Michael (266 ) From: Michael Monday, Dec 6 1999 1:36PM ET Reply # of 270 eb-mag.com INDUSTRY LEADERS PILLARS OF HIGH TECH Towering over the industry, EB's pillars of 1999 By Russ Britt and Tam Harbert ............... 32-bit royalty Robin Saxby, chairman and CEO of ARM Holdings PLC, Cambridge, England, has become a high-tech king in Britain for creating a Silicon-Valley-like company whose stock has soared in the public markets (see Electronic Business, November 1999, page 52). But in global semiconductor circles, the admiration stems more from the way he did it. Saxby helped create a new business model in the chip industry, that of licensing intellectual property (in this case a 32-bit reduced instruction set computing (RISC) microprocessor design) rather than manufacturing chips or hiring a foundry to manufacture them. Instead, ARM relies on more than 30 semiconductor partners to refine the design and make chips targeted at specific OEM markets, including everything from cell phones to anti-lock braking systems in cars. In addition to license fees, ARM earns a royalty every time an ARM-based chip ships. Recognizing the lucrative nature of this business model, the financial markets have capitalized ARM at more than $7 billion as of mid-November, even though analysts estimate that it will report less than $100 million in revenues in 1999. But Saxby has a daunting management task over the next five years. His company is growing at a breakneck pace. For a company that sells intellectual property, smart people are crucial. Saxby estimates that he has to add at least 100 employees a year (present head count is about 400) to keep up with the growth. He's already having a hard time finding enough people, and it could get worse. Saxby has said that a key to ARM's success has been open and direct communication. Keeping that communication free flowing, within the company and with its increasing number of partners, will be difficult as the company evolves from a small, close-knit group of engineers to a larger corporation with several layers of management. Saxby recognizes these challenges. He doesn't feel threatened by other companies licensing processor cores, he says. Rather, the biggest threat to ARM is ARM itself. "The threat is our ability to implement," he says. --Tam Harbert Note: The only probabem with the king designation may be that ARMHY does seem to have have some possible gorilla tendencies. Anyway, suggest it is worth a look.