Risc-ing his ARM

When a firm of 12 engineers set out to establish the global standard for RISC chips everyone thought it was crazy – now the technology is in most mobiles. So when its chairman predicts the convergence of biotechnology and microelectronics, who is to argue

Bad press and a lack of understanding of the real pace of development could be turning the UK into a nation of technophobes, believes Sir Robin Saxby.

The chairman of UK chip designer ARM, which until last month had itself enjoyed a relatively good press thanks to its success in weathering the downturn in the semiconductor industry, claims the UK public has much less of a grasp of the importance of technology than people in the US and Asia.

He blames this lack of understanding and interest in part on poor and inaccurate reporting, particularly by the national newspapers. Half-truths and rumours printed in the press are damaging the public’s perception of science and technology, he argues. ‘I would like ordinary people to understand technology better, so when I see huge mistakes or complete nonsense in the newspapers it worries me.’

The problem is one that is peculiar to the UK, he says. ‘When I go east the profile of science and technology is so much greater, as it is in the US. The general awareness of the importance of technology is lacking here.’

His annoyance with the nation’s press can partly be explained by the tendency of many newspapers to call ARM a chip maker, a practice that clearly annoys him. The company does not in fact manufacture anything: it licenses designs of its 32-bit RISC (reduced instruction set computing) technology to manufacturers such as Intel and Sharp, and earns revenues through royalties. Even the supposedly hamstrung press of communist China is more accurate in its reporting of technology and business news than that of the UK, he says.

Saxby is just back from a trip to China, where he was part of a hi-tech delegation organised by the DTI to forge closer science and technology ties between the UK and the People’s Republic, which also included Sir Harry Kroto and Hermann Hauser of venture capital firm Amadeus Capital Partners. Amazed by the size of the country’s semiconductor industry – ARM has recently opened an office in China – he was also impressed with how ‘trendy’ the mobile phones were.

Wearing a Ralph Lauren shirt he picked up for about £8 while he was over there (‘engineers always get things on the cheap’), Saxby seems surprisingly relaxed considering the month he has just had. The company hit the headlines in October when for the first time in its history it unveiled plans to cut jobs – 80 staff or 10 per cent of its workforce – after pre-tax profits for the third quarter fell 38 per cent to £8m. This came on the back of a profit warning two weeks earlier, which had caused the company’s shares to slump by 60 per cent. ‘It was the worst month in the whole of our history,’ Saxby admits.

He blamed the job cuts on weak demand for its latest technology, as mobile phone makers delayed investment in new chips. But Saxby is at pains to stress that the company is still making a profit, unlike its direct competitors. An avid Liverpool FC fan who regularly travels up to Anfield from his home in the south-east, he believes that, like demanding football fans, investors have been punishing the company for its previous success.

ARM had been seen as a haven from the problems affecting the rest of the sector, after bucking the slump in the industry and producing 18 quarters of consecutive earnings growth. ‘It’s like football: when you keep winning matches they expect you to win them for ever, but occasionally life catches up with you.’

The same can be said of demand for new technology. At the height of the mobile phone boom investors were pouring money into the sector, and public anticipation was mounting over the expected revolution in mobile communications to be brought about by the arrival of third-generation technology.

The financial markets added to this sense of hype by pouring money into the sector, says Saxby. ‘The financial markets always get excited about new technology and how many billions of units are going to be sold. Usually the people who do this are quite young, and haven’t been through previous down cycles, so they get carried away and the numbers go up and up.’

Then reality struck. Technical glitches led to delays in launching 3G, and many began to question whether the public would actually want the services being offered. Huge sums were wiped off network operators’ market valuations, causing them to slash their spending on new equipment, which in turn hit the profits of chip manufacturers, ARM’s customers, and caused them to cut jobs.

But despite these problems Saxby believes 3G will be a success, and blames the hype and resultant backlash on the public’s lack of understanding of how long it takes to fine-tune developing technology. Every new piece of technology takes about 10 years to get right, he says.

‘We need to say to the public: well, of course the technology does not work straight away, but just look at what it does for your life.

‘I remember being on a flight to the US, when we were redirected to Reykjavik because someone was feeling ill. Just think of the amount of money it cost to redirect that aircraft. Now they have monitoring systems on-board where passengers can be hooked up to a seat to check them out, allowing the crew to decide if they need to divert the aircraft, so little things like this have a huge impact.’

Technological developments over the past 10 years have already transformed the way we communicate and access information. During his recent trip to China Saxby was watching Liverpool beat Tottenham Hotspur live on satellite television when the result of championship rival Arsenal’s game was flashed up on the screen (Arsenal was losing, putting Liverpool four points clear at the top of the Premiership). He immediately telephoned his daughter, who was watching the game at Anfield, and was able to pass the good news around the Kop.

Back in 1990, when ARM was spun out of Acorn, the company responsible for developing the world’s first commercial single-chip RISC processor for low-cost PCs, Saxby claims he envisaged the move towards handheld gadgets based on tiny, cheap and low power microchips. ‘That was our original business plan. People thought we were crazy saying we would put RISC chips in mobile phones.’

At the time the company had just 12 engineers, but aimed to become the global standard for RISC chips. In November last year the one billionth ARM chip was shipped, and the company’s technology is now in around 70-80 per cent of the world’s mobile phones, as well as devices such as set-top boxes for digital television, Compaq PDAs, digital cameras and the Nintendo Gameboy Advance.

The company says it aims to be ‘the global architecture for the digital age’, or the standard chip technology for use in digital devices. The move towards miniaturisation is helping in its progress, says Saxby. ‘All these advanced digital products can use more and more ARM technology. They need more computing power, but because they are consumer products they need to be low cost and they need to consume less power.’

The company’s designs are capable of high processing speeds but can also be produced cheaply and consume only milliwatts of power, he says.

Having predicted the boom in mobile phones with built-in computing power, Saxby envisages there will shortly be another growth spurt in consumer demand, leading to the day when all portable appliances will be connected to the internet through wireless technology. This will in turn lead to a dramatic rise in demand for wireless security technology, to protect mobile transactions, he says.

Remote monitoring and control of the home is another area he expects to benefit from this new consumer boom, as houses have for some time lagged behind offices in becoming wired up to the outside world. ‘The home will be a major area of growth, allowing people to control things like the temperature of their house while they are away, and monitor its security.’

Beyond this consumer growth the convergence of microelectronics and biotechnology will lead to another rise in demand for ever increasing levels of computing power on chips. This rise is already being seen in the development of mobile health-monitoring systems capable of sensing vital signs such as heartbeat and temperature, and alerting the patient and their doctor to any problems. As this technology develops, and people become accustomed to the use of electronic devices, he believes the trend will inevitably lead to chips being inserted into the human body, as pioneered by scientists such as Prof. Kevin Warwick at Reading University.

The trend has already started, he says. Researchers in the UK recently developed a ‘telephone tooth’, an implant that allows people to receive calls, listen to music or even connect to verbal sites on the internet, without anyone nearby hearing anything.

But for some this is just the beginning of man’s convergence with microelectronics. ‘Some people believe that ultimately the human being will become a machine, meaning we could go through the internet to Japan instead of having to fly, which is a bit crazy, but that’s at the extreme end.’

While this may be taking advances in microelectronics too far, there is no doubt portable electronic devices are likely to have an even bigger impact on our lives in future, as the technology develops. ‘In my view the digital age has not really started yet, and it will change people’s lives,’ he says.

If Saxby has his way ARM technology is likely to be at the heart of this digital revolution. Just don’t call him a chip maker.

FOR THE RECORD

Sir Robin Saxby was involved in the founding of Advanced RISC Machines in 1990 on its spinout from Acorn, and joined the company full time in 1991. Having been criticised in the media for his position as both chairman and chief executive of the company, he split the roles in October last year, becoming executive chairman.

After graduating from Liverpool University in 1968, Saxby began his career working in research and development for radio and television maker Rank Bush Murphy and Pye TMC, a division of Phillips. He then moved to Motorola Semiconductors, where he spent 11 years in a variety of roles, including engineering management. Between 1984 and 1986 he was chief executive of Henderson Security Systems, after which he moved to European Silicon Structures (ES2), where he was vice-president for northern Europe and president of its US affiliate US2.

Saxby has also chaired the Open Microprocessor Initiative Advisory Group, an EU panel established to advise on R&D collaboration in Europe, and is a visiting professor at Liverpool University. In February he donated shares worth £500,000 to the university, where both he and his wife studied and his daughter now attends.

As well as two honorary doctorates, one from Liverpool and one from Loughborough University, Saxby was awarded a knighthood in the 2002 New Years Honours list for his services to the IT industry.

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