ARM eyes Chinese design center in 3-5 years

PARIS (Reuters) - British microchip designer ARM Holdings Plc (ARM.L: Quote, Profile, Research, Stock Buzz) will set up a design center in China in the next three to five years to tap the Asian giant's growing importance in the electronics market, its chief executive said.

"We find it inconceivable that we won't have more design in China within five years," Warren East told the Reuters Global Technology, Media and Telecoms summit in Paris on Wednesday.

"Maybe we'll do it sooner, but I think it will be quite a few years before we design a microprocessor in China.

East said ARM generated 4 percent of its royalty revenues from China and already had some 20 people in the country, which is an electronics manufacturing powerhouse and is increasingly becoming a design site for many of ARM's fabless semiconductor customers.

The group has already opened a design center in the Indian city of Bangalore with some 240 engineers in a bid to be closer to its global semiconductor industry customers, many of which do a lot of their design work from India.

East said there were concerns about intellectual property protection in China, but it was not an "overriding" one.

"There are design decisions being made there, and we want to be the architect of the digital world and China has got a vast proportion of the electronics market. We're going to be there," he added.

ARM, which designs the blueprint which semiconductor makers use to make microprocessors used in phones, camera, computers and automobiles, said it had devised a different business model in China aimed to protect its intellectual property.

The group supplies its technology in two parts, with Chinese design companies getting only part of the deliverables and others getting the rest. One part of the design would be useless without the other.