Sanyo will use ARM's microprocessor technology in its microcontrollers, the companies said today. The Japanese consumer electronics company will use the chips in information appliances, including mobile phones, digital cameras and PC peripherals.
An intellectual property company, ARM licenses its microprocessor architecture to chip and electronics manufacturers. ARM's designs are largely targeted at portable products of the type Sanyo is looking to develop.
A total of 21 manufacturers shipped 78.7 million ARM-based chips in the first quarter of this year. ARM chips can be found in portables from Nokia and Hewlett-Packard, while Palm and Acer will adopt ARM processors for future handhelds.
Under the terms of the licensing agreement with ARM, Sanyo is developing a new integrated chip designed for limited use in devices such as cell phones. These microcontrollers will be based on ARM's core technology, the companies said.
"We believe that our strong partnership will bring about dramatic changes in the microcontroller market," Toru Akiyama, deputy general manager of Sanyo's semiconductor group, said in a statement.
ARM has emerged as one of the companies to beat in the world of microprocessors for devices. Based in Oxford, England, ARM earns money from licensing fees, initial sign-up and technology access fees paid by manufacturers, as well as royalties, which are related to chip production.
"Royalties are 100 percent gross margin," Robin Saxby, ARM's CEO, said last week at the Robertson Stephens Semiconductor Conference in San Francisco. As a result, ARM's profits often grow faster than revenue.
But the company's fortunes are explicitly tied to the success or failure of its manufacturing and device partners. Nokia, which uses ARM chips, recently warned a sales slowdown in its mobile phones. Because of the cooling of sales, Saxby said ARM's revenue could take a hit. "I suspect there will be some slowdown in the mobile space," the CEO said.
The company's most well known product is the ARM core, a microprocessor core used inside cell phones and some handheld computers based on Microsoft's Pocket PC system, as well as in a new Linux-based personal digital assistant (PDA) from Samsung.
ARM's market share in the PDA market is set to expand in the next year, when Palm begins using the company's chip in its devices. Palm, which has about 70 percent of the handheld computer market, has said it will upgrade its devices from the Motorola Dragonball chip to an ARM-based processor. Saxby said Palm would likely use a variety of ARM-based chips.
Next-generation Palms based on ARM chips would likely support higher-resolution color screens and more data-intensive applications, including wireless services. Palm has said that it is focusing almost exclusively on bringing wireless services to its devices in the next year.
Most ARM chips are based around the ARM 7 or ARM 9 generation of design, or core, but a new core is coming in the second half of this year.
In addition, ARM will release a design for a Java chip for wireless handhelds in the second half of this year, Saxby said. Chips based on the design essentially will serve as a "Java turbocharger," he said.
Later, ARM will release chip designs featuring hardware-level security for e-commerce transactions and chips for better Internet media processing. "We see a lot of activity in the Bluetooth area," he said.