ARM Holdings PLC, which designs processors including those that power Apple Inc’s iPhones, yesterday said staggering global economy has not severely impacted its business as shipments of ARM-based chips are still rising.
The British company’s comments came as its customers such as MediaTek Inc (聯發科) started feeling the pinch of falling demand due to faltering global economy, China particularly, and weak local currencies against the US dollar in emerging markets.“There’s always the risk, but so far, we’ve seen people still buying smartphones, still buying networking equipment. We haven’t seen that [impact of weak economy] yet,” James McNiven, general manager of ARM’s CPU group, said in an interview in Taipei.
“We are still seeing growth in all three tiers” in premium, mid-range and entry-level phones, McNiven said.
“We are optimistic about the growth... Everybody is still saying 8 percent annual compound growth rate over the next five years,” McNiven said.
The global smartphone market is expected to grow to 2.1 billion units in 2020, compared with 1.4 billion units last year, McNiven said, citing a forecast jointly made by ARM and Gartner Inc.
The biggest growth would come from entry-level models, he said.
The number of low-end smartphones is expected to reach 1 billion units in 2020, up from 600 million last year, he said.
To cope with this shift in market demand, ARM last week launched its ultra-high-efficiency Coretax-A35 processor to target the “next billion” market, he added.
The London-based company is also looking for new growth from networking, servers and the Internet of Things applications, McNiven said.
The company aims to seize a 45 percent share of global networking chip market in 2020, up from 10 percent last year, he said.
Server production is another growing area for the company. In September, ARM raised its server market share target to 25 percent in 2020 from a previous goal of 20 percent, as more companies, including Qualcomm Inc, adopt ARM-based server chips.
China’s Hisilicon Technologies Co (海思), owned by Huawei Technologies Co (華為), also taps into the server market by shipping ARM-baed server processors.
In the Internet of Things area, “smart home” and “smart city” ideas are two major driving forces.
The smart home business is to see an annual compound growth rate of 50 percent over the next five years and smart city business is to have a 60 percent increase by 2020, according to ARM’s forecast.
Street lamps and smart meters for households are to be among the rapidest growing areas, McNiven said.
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