ARM tightens grip on chip IP market

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ARM tightens grip on chip IP market

EBN

06/18/2003 8:00 AM EST
URL: http://www.my-esm.com/showArticle?articleID=10700366

ARM Holdings Plc increased its share of the semiconductor IP market in 2002 and pulled strongly ahead of No. 2 global supplier Rambus Inc. even as the entire industry thrashed around for a viable business model, according to researcher Gartner Dataquest.

Cambridge, England-based ARM raised its IP revenue to $185 million in 2002, up 10% for the year and giving it a 20% market share, a one percentage point increase from 2001.

Rambus' market share declined to 10% in 2002 from 12% in the prior year while its revenue fell 9%, to $97 million from $107 million in 2001, Gartner said in a statement today.

Although the entire semiconductor IP market grew approximately 5% in 2002, to $934 million from $892 million in 2001, the leading vendors are still struggling to refine their business model to compensate for a deep decline in royalty revenue witnessed in 2002.

"Business models for IP vendors are a topic of much discussion, with a large amount of experimentation taking place," said Jim Tully, vice president and research director for Gartner's emerging technologies and semiconductor group.

"Vendors must develop business models that will build royalty revenue for the benefit of vendors and users," Tully added. "But, the royalty percentage should not be allowed to grow over 50% as this would expose vendors to the relative volatility of the semiconductor market."

There were very few changes in the ranks of the top-10 semiconductor IP suppliers in 2002 with ARM and Rambus still accounting for approximately 30% of the market while the top-5 companies make up 50% of the market.

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