ARM Holdings, one of the UK’s biggest technology companies, has been taken over by a Japanese company for £24bn. The country’s new Prime Minister is citing it as a success of Brexit – but Steve Furber says it’s on a par with selling the crown jewels.
Was it a coincidence that, during the week that ARM announced it was being sold to the Japan-based SoftBank, Sophie Wilson and I got recognition from the Royal Society for our contributions to the design and analysis of the Acorn RISC Machine (ARM) microprocessor in the 1980s?
ARM technology is close to my heart and we have a shared history, although my involvement with ARM technology predates the existence of the company.
Back in the 1980s I led the development of the early ARM processors at Acorn Computers. In those days ARM stood for Acorn RISC Machine, where RISC stood for Reduced Instruction Set Computer, a radical approach to the design of a microprocessor first expounded by the great American universities at Berkeley and Stanford.
In those days the common view was that we could invent things in Britain, but it took American companies to turn those inventions into commercial success. With the ARM we reversed this, taking US academic research and turning it into a major success for British industry, though really Sophie and I just sowed the seeds of that success.
Pioneering visionary with entrepreneurial flair
It took Sir Robin Saxby’s vision of turning the ARM into a global success over its first decade – all of which happened after I had returned to academia in Manchester – through the creation, amongst other things, of a radically new business model. This was followed by Warren East’s very successful decade in charge. Warren has now taken on leadership of another British engineering icon – Rolls Royce – and I can only hope that he is as successful there as he was at ARM.
Under these leaders, and through the efforts of a few thousand very bright and industrious staff, ARM grew into a major global technology company that, more than any other, has defined the evolution of computer technology over the last quarter of a century.
My iPhone states on the back that it was designed by Apple in California and assembled in China. What it does not state is that it is powered by a small host of compute engines based around an architecture designed by ARM in Britain. But I know that to be the case.
In any country on the planet, even in the remotest village, folk are using ARM technology to communicate. In any room where I speak, I know that there are more ARM processors in pockets than there are faces in the audience. At the last count, over 75 billion ARM processors had been manufactured – that’s over 10 for every human on the planet.
Why the takeover is bad news
In my opinion news of the takeover is bad news. Although the offer price is a decent-enough premium and there is a promise of doubling the number of UK ARM jobs, I think it is bad news because it is the last British technology company with a global reach. And in the BBC report Acorn founder Hermann Hauser summed up my feeling saying that “This is a sad day for me and a sad day for technology in Britain… ARM gave Britain real strength. It was a British company that determined the next generation microprocessor architecture.”
What else is there to say? ARM will continue to trade, and its new owners have promised that it will retain its independence, so in all likelihood it will continue to flourish. Does the ownership of a company’s equity really matter in any case? Once a company has made a public offering its shares are openly traded, so the company has relinquished control over who owns it.
However, a corporate take-over makes the ownership unambiguous, and the ultimate fate of the company is then outside its control. The board of directors can no longer negotiate and deal with a range of shareholders; they must now do as they are told by their owners. At a much lower level, the shares are no longer traded on the stock market, so individuals who wish to buy a stake in this leading British technology company – and I know many who did, at least partly as an expression of national pride – can no longer do so.
None of the above should be taken as any sort of disrespect to the new owners, or to Japanese business. I have many Japanese contacts and friends, and a great affinity and respect for Japanese business and culture. That isn’t the problem.
Evidence that Brexit has worked?
Apparently (according to the same BBC news item) Theresa May views the ARM deal as “in the country’s national interest”, and cites it as evidence that we can make a success of leaving the EU. Chancellor Philip Hammond also welcomed the deal. I disagree.
In my view what this deal represents is on a par with selling the crown jewels. The British industrial crown has few enough prize jewels in it, and I cannot rejoice at the sale of one of the brightest – especially one that I had a small part in creating.
I am delighted by the Royal Society Award but, like Hermann (and others) I am deeply saddened by the sale of the company. What else is there to say?