will have no choice but to buy
The first reason is that ARM controls the market for smartphone processors, and Intel won't be able to knock it off that perch.
ARM CEO Warren East said the other day in an interview, "I'm sure that Intel are going to get their Atom designed into a few handsets, it's an inevitability. They go on their hands and knees. There will be a little bit of leakage, but it's not going to be dramatic either way."
I wholeheartedly agree. Intel will get some design wins, primarily from
, but ARM continues to make advanced processors, and there are too many leading semiconductor companies licensing its products for Intel to make inroads.
Remember that ARM owns the mobile Internet device (MID) space. It owns 95% of the mobile phone market and 85% of the smartphone market in unit shipments. ARM processors are being manufactured in the best semiconductor facilities.
Also remember that ARM has a very long list of current and former licensees:
Digital Equipment Corp.
, Intel (through DEC),
Marvell Technology Group
and, oh yes,
Taiwan Semiconductor Manufacturing
ARM CEO East also said, "I don't think ARM is going to take over the PC world from Intel, and I don't think Intel is going to take the smartphone world from ARM."
I disagree and think he's just being humble, and this brings us to the second reason I think Intel will have to acquire ARM.
In a September
, I wrote that ARM will gain 55% of the netbook and smartbook market in 2012, the other sector where Intel's Atom processors compete with ARM processors.
Why did I make such a controversial statement?
Analyzing these markets for the past 25 years has given me insight. And I can't look past the promise of
Chrome and cloud computing as avenues to ARM's success. In fact, new evidence is reinforcing my prognostications.
According to a Nov. 24 article in
, "Although it's not really known what the percentage of netbooks running Linux is, the number may have increased. In April,
cited NPD studies that claimed just 4% of netbooks in the U.S. ran a non-Microsoft operating system. But ABI Research claimed in November that about one-third of all netbooks shipping globally this year will contain Linux or some other non-Microsoft OS."
So, not only will ARM continue to dominate the mobile-phone market, it will eventually lead the netbook market, too. Intel should pay attention and buy ARM.
At the time of publication, Castellano had no positions in stocks mentioned.
Robert N. Castellano, Ph.D, is President of The Information Network, a leading consulting and market-research firm for the semiconductor, LCD, HDD and solar industries. Castellano is internationally recognized as one of the leading experts in these areas. He has nearly 25 years of expertise as an industry analyst. Castellano has provided insight on emerging technologies to many business and technical publications, including Business 2.0, BusinessWeek, The Economist, Forbes, Investor's Business Daily, Los Angeles Times Magazine, The New York Times, USA Today and The Wall Street Journal. He is a frequent speaker at conferences and corporate events. He has over 10 years' experience in the field of wafer fabrication at AT&T Bell Laboratories and Stanford University before founding The Information Network in 1985. He has been editor of the peer-reviewed Journal of Active and Passive Electronic Devices since 1985. He is author of the book "Technology Trends in VLSI Manufacturing," published by Gordon and Breach. His book "Solar Cell Processing" was published in 2009 by Old City Publishing. He received his Ph.D. in solid state chemistry from Oxford University.