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Business Wars · May 16, 2023 · 33m

ARM vs Qualcomm: The Chip Architecture War

David Brown

Brown tells the story of ARM's rise from a small British chip designer to the architecture inside every smartphone on Earth. ARM doesn't make chips — it licenses designs — and this business model made it the most important company most people have never heard of.

Canon

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Return on luck — ARM was founded as a spinoff from Acorn Computers, a failed British computer company. The failure of Acorn was the lucky event that freed ARM to license its designs to everyone instead of keeping them proprietary.
Brown traces ARM's origin: it was spun out of Acorn Computers (which failed in the PC market against IBM). Had Acorn succeeded, ARM's designs would have been proprietary to Acorn. Acorn's failure was the lucky event that freed ARM to license to everyone, creating the open architecture that now powers every smartphone.
ClaudeChatGPTGemini

Highlights

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ARM designs the chip architecture inside 99% of smartphones without manufacturing a single chip — the most leveraged business model in the semiconductor industry
Brown explains ARM's unique model: ARM designs chip architectures and licenses them to manufacturers (Apple, Qualcomm, Samsung, MediaTek). ARM earns a royalty on every chip sold — roughly $0.05 per chip x 25+ billion chips per year. Zero manufacturing risk, near-100% margins on licensing.
ClaudeChatGPTGemini