Intel Corporation(NASDAQ:INTC)’s rival company ARM Holdings plc (ADR)(NASDAQ:ARMH) which is already a leader in the mobile chips segment, is now giving Intel a run for its money in the emerging business of semiconductors . These substances are used for anything from cutlery to cars.
ARM’s arm which is involved in embedded processing grew by 25 percent last year and was amongst the fastest growing segment. The company did a chunk of its sales from products besides mobile phones and its CEO expects this percentage to increase further.
Chips are being designed by companies to make utility meters and some other appliances which will help in translating business of about $47.3 billion by 2016, a jump of about 23 percent over the 2012 figures. ARM’s technology would be increasingly used by bigwigs like Texas instruments and Freescale Semiconductor Ltd.
Although the leading chip maker for personal computers Intel has more than 80 percent market share, the slump in PC sales last month, first time in a decade, means that the company needs to innovate and look for newer avenues for growth.
The share price of ARM has surged by 59 percent in the last one year whereas its rivals have faced a hard time. The company’s market value now stands at about $20 billion. On the other hand, Intel is faced with a challenge of lower share in segments such as mobile-phone processor, embedded processors where it commands less than 2 percent market share. According to experts, these segments will grow exponentially over the next 3-4 years.
The embedded processors share of ARM is likely to increase by about 8 percent over the next 4 years. Also, ARM designs are becoming ubiquitous with more smartphone makers utilizing them for their products. On the contrary, Intel is focusing on segments like retail, automotive and industrial-control for its growth. Companies like Pepsico, Bayerische Motoren Werke are already using their products.