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No strategy shift ahead for ARM, incoming CEO says

Simon Segars, who takes over as CEO this summer, tells CNET the company will continue to focus on growing in the phone market, as well as expanding in new areas such as servers, networking, and other smart devices.

ARM President Simon Segars will take over as CEO this summer.
ARM Holdings will have a new CEO soon, but the chip designer's strategy won't be changing.

Simon Segars, ARM's president who will take over the CEO role from Warren East in July,told CNET today that he'll be focused on executing the current plans in place, rather than overhauling ARM's strategy.

"What we've been doing is a very appropriate strategy for responding to the dynamics of the market in which we operate," Segars said. "There will be no fundamental shift in strategy. It's about execution and making sure we take advantage of the markets and continue to grow market share."

ARM develops the underlying semiconductor architecture used in the vast majority of mobile devices. ARM-based chips traditionally have been more power efficient than x86-based chips from Intel and Advanced Micro Devices, which makes them well-suited for mobile devices, as well as other items such as televisions, refrigerators, and even low-power servers. Its technology is licensed by Qualcomm, Nvidia, Texas Instruments, Apple, and Samsung, among many others.

Under East's leadership, ARM has gone from a little-known British company to one of the most important semiconductor technology providers in the industry. The number of companies licensing ARM technology soared to 322 in 2012 from 77 in 2001, the year East became CEO. And those licensees shipped 8.7 billion chips last year, a huge leap from 2001's level of 420 million.

ARM CEO Warren East ARM

The main reason for that growth is the soaring mobile market, but ARM also is looking to expand into other areas such as data center products and other connected devices such as appliances.

Segars said it's still early days in some of the new markets, but ARM-based chip suppliers already are making inroads. For example, low-power, ARM-based servers are starting to hit the market.

"We have a fantastic platform for growth here," Segars said.

East, meanwhile, told CNET he decided now was the time to step down as the actions that ARM is taking now won't show up in products for many years, and he didn't want to remain CEO into the 2020s. In addition, he wanted to hand over the reins when ARM's business was healthy.

"We're doing things and making plans now for activities that will fuel the growth of ARM in 2020 and beyond," East said. "It's important for the leader overseeing those plans and implementing those plans ... to be in place all the way through...If I see that through, I would be CEO for 20 years, which is too long for the business."

East isn't the only semiconductor CEO retiring this year. Intel Chief Executive Paul Otellini will be stepping down in May. It's unclear who will be his successor, but there's no doubt both CEOs will play a major role in shaping the tech industry's future.

"It's a total coincidence," East said. "When I saw the Intel announcement in November, I thought it was annoying, that [the retirements] were going to coincide. We have our plans and we've executed according to our plans. What Intel does is up to them."

ARM's performance during Warren East's time as CEO. ARM

Both retirement announcements largely came as a surprise. BMO Capital Markets analyst Ambrish Srivastava noted he expected Segars to take over as CEO, but the transition is coming a little sooner than he thought.

East joined ARM in 1994 to establish the company's consulting business. He later became vice president of business operations and was named chief operating officer within three years. ARM appointed East as its CEO in October 2001.

Segars, meanwhile, joined ARM in 1991. Since that time, he has held various executive roles include executive vice president of engineering, executive vice president of worldwide sales, and executive vice president of business development. He joined ARM's board in January 2005 and became president in January.