ARM takes a hit as Intel chips away at market

ARM Holdings suffered its biggest blow to date in the mobile processor wars yesterday, as Samsung announced that its new tablet computer would run on a chip powered by arch-rival Intel.

The Cambridge-based company, which designs the chips used in almost all of the world’s smartphones and tablets, saw shares fall by 7.3 per cent, making it the biggest loser on the FTSE 100.

ARM has gone from strength to strength in the last five years as it has come to dominate the market while holding off a determined Intel, but the US firm has redoubled efforts recently as it sees the PC industry, which makes up its core business, suffer. Intel has had only small successes in mobile to date, including being used in Motorola’s latest handset, but being included in Samsung’s iPad rival, the 10-inch Galaxy Tab 3, is its biggest victory so far.

Although this is just a tiny dent in ARM’s market share, it raised fears that the much better-resourced Intel could make further strides. The spectre of an Intel renaissance has long haunted ARM’s meteoric rise, which has sent shares rising 10-fold since the start of 2009.

The British firm, which enters a new era this summer as company president Simon Segars takes over from long-time chief executive Warren East, sought to regain some of the initiative yesterday, unveiling a new processor aimed at mid-range smartphones.

ARM said the Cortex A-12 processor would deliver 40 per cent more power than current chips, and will feature in 500m devices by 2015.