Simon Segars, CEO of the Cambridge, England-basedArm, took the stage at last weeks Arm TechCon 2019 event in San Jose, California to tell the companys ecosystem of partners about its future plans.

Arm designs the underlying architecture and semiconductor chip components for its partners, who license the technology and put it into a wide range of chips that drive just about everything electronic, from smart doorbells to energy-efficient Arm-based servers. Arms partners have shipped more than 150 billion chips to date, and in the next two years Segars expects 50 billion more to ship.

The world is undergoing nothing less than an electronics revolution, and Arm is at the center of it. The internet of things everyday devices that are smart and connected could reach more than a trillion units by 2035, Segars said.

These dynamics attracted Japans SoftBank and led to its $31 billion acquisition of Arm in 2016. SoftBank CEO Masayoshi Son said he was readying his company for the Singularity, or the day when AI exceeds the collective intelligence of humanity, in a few decades. But last year Son acknowledged that he might spin off Arm in an initial public offering, possibly within five years (by 2023).

Segars is trying to run the company as usual in the meantime, with a near-doubling of the companys staff to more than 6,500 people. At TechCon, he announced that Arm would fend off competition by enabling custom instructions for embedded centralized processing units (CPUs) to give chipmakers more flexibility in a changing world.

I sat down with a group of reporters at Arm TechCon 2019 last week to talk with Segars in a wide-ranging interview. We discussed the possible IPO, the custom instructions, Arms moves in IoT, its interest in security, and the state of competition.

This interview has been edited for length and clarity, and questions have been reordered by theme.

Above: Simon Segars, Arm CEO, at a press group interview at Arm TechCon 2019.

Image Credit: Dean Takahashi

Question: I talked to a couple of analysts who felt like the custom instructions were a nod toward the competition from RISC-V.

Simon Segars: The way were looking at it is that chip design is evolving in multiple ways in parallel. You have consolidation going on amongst big chip companies, producing large players who are investing on the leading edge. They have the size and scale to build very complex devices. You have some OEMs who want to build chips. You have various smaller companies who are looking at how to create things much more optimized for specific applications, especially in this world of IoT. Theres a range of different solutions out there for how people can extend the capability of what an ARM processor does based on the workload.

Our inclusion of the custom instructions is based on feedback from the market. In some areas having a dedicated accelerator sitting in the memory map or sitting as a co-processor, that works very well. There are some other applications where doing that final optimization can make a big difference. Weve listened to the market. Weve thought long and hard about how we add that flexibility and maintain the benefits weve had for our entire history of standardization and that big software ecosystem weve developed. This seems like a good way to address all those needs. Its really driven by the needs of the market more than anything else.

Question: How should we visualize what this new customization ability addresses?

Above: Arm custom instructions

Image Credit: Arm

Segars: The target market is actually quite broad. When you look at the biggest shippers of ARM-based microcontrollers today, its companies that have been around a long time. They have broad portfolios of microcontrollers where theyre taking, say, a Cortex-M3, M33, whatever, and building portfolios around them that produce hundreds of SKUs. They ship development boards. They ship a lot of software support to go with that, so that as a developer you have this library of functions prebuilt for you that you can integrate together in software, whatever application in particular you want to build.

I anticipate companies looking at particular markets, like motor control. We have these libraries today that are implemented using special ARM instructions. If, as we implement our Cortex-M33, we can add some special feature, maybe we can halve the run time of that library that does some operation to work out where to take the motor to next. Companies like that are going to do those optimizations and build them into the board support packages that they create.

There will be some others in the startup category that are going to focus on one specific thing, as opposed to a broad portfolio of MCUs that theyre largely shipping to distributors. They might have some market in mind where adding some instructions can, again, just optimize for that. Again, I think its going to be quite broadly applicable. Were going to see big, classic MCU shippers adopting it, and were going to see smaller startups.

Question: How do you add custom instructions and still maintain the ecosystem?

Segars: Were trying to enable the best of all worlds. One key thing is that the custom instructions that can be added are purely additive to the core instruction set. The operating system that might sit on top of this processor isnt going to rely on custom instructions. It might call a routine where, if the custom instructions are there, it runs very efficiently, and if theyre not there, it goes and does something else. But the core operating system that you can take off the shelf and run, that will still run on every ARM processor, because all the instructions that are defined today are still there.

Were not enabling people to strip stuff out and risk having a C compiler spit out code that wont work. Theres still that compatibility with the architecture. This is an opportunity to add things for the regular code its never going to touch, but specific application optimizations could take advantage of this in a particular vendors set of support tools.

That isnt very different, at the chip level, from what we have today. There may be, in an MCU, some accelerator thats sitting completely outside the core. It sits in a memory map. Again, one of these library routines might call upon it to do something. If that accelerator isnt there in Vendor Bs chip, its not going to do anything. Same principle applies here, but its more tightly integrated. For some functions we think thats going to deliver significant performance uplift for very small overhead in silicon. Thats much more efficient than building a completely separate accelerator.

Question: Should we expect the majority of customers to do custom instructions?

Segars: No, I dont think the majority. Like any instruction set check, when we look at the architecture were going to put this in. Whats this used for? Who is going to use it? How do we support it? Its a significant step to add something into the architecture, to change it. I think youll see companies think long and hard about it. Again, back to this mix of partners we have, bigger companies maybe standardize around a few optimizations, make sure theres great support for it, and then youll have some small guys that focus on one thing. But I dont think youre going to suddenly see a million and one different variations.

Above: Simon Segars expects a trillion internet of things devices by 2035.

Image Credit: Dean Takahashi

Question: Do you have any updates about a new IPO?

Segars: At last years SoftBank AGM [annual general meeting], Masa said that in about five years, well have an IPO of Arm. Thats not a hard and fast ruling, where on July 10, 2023 well have an IPO. Its not cast in stone.

What were doing is investing to make Arm a more valuable company. Were investing to do that through the development of technologies, the development of our ecosystem, to ensure that we can grow with the growing opportunity thats represented by IoT and AI and 5G and autonomous vehicles and continued growth in mobile. I think there are a number of these technologies that will drive growth for the semiconductor industry, and since we supply into that, we want to make sure were providing the building blocks for chip companies that want to serve those markets.

It feels to me that in that sort of 2023 time frame, we should be seeing the real fruits of that investment. We should be seeing revenues take off from the sale of those chips, and that should be flowing to the profitability of ARM. If all that comes together and the conditions are right, that would be a good time to have an IPO of Arm and release some of that back.

Question: You mentioned driving growth, having a mandate from SoftBank to drive growth and push forward as fast as you possibly can, and not be as concerned about quarterly earnings and so forth. What does that mean for Arm in terms of the overall attitude as you continue to drive growth?

Segars: For now, nothing has changed. Weve been investing our profits in growing the company. Since the acquisition as you know, prior to, we were a very profitable company. We operated with roughly 50% margins. Weve taken that down significantly and invested our profitability in our growth to develop this long-term road map of compute solutions for these growing markets. None of that has changed relative to anything thats gone on in the rest of the SoftBank portfolio. For us were continuing on that mission. Its business as usual.

If and when Arm becomes a public company, the stake in the ground is 2023. Thats a while off. We need to have gone through this phase of investment, seeing the growth in the end markets, seeing how that growth in top-line converts and profitability a lot of things need to fall into place for us to be in the right shape to go back to the public markets. Were on a runway to do that. Thats not changed based on anything else thats going on across the board.

Question: If you were to relist as a public company, where would you might like to do it?

Segars: Its not something were spending any time as a board discussing. Its still a long way away. If we were to relist, it would be in a market that takes a long-term view on technology. We had a great time being a public company previously, with a primary listing in London and a secondary listing in the U.S. The world is a different place from what it was in 1998 when we went public and that choice was made. Well determine how much closer.

Question: As a board member of SoftBank, can I ask you about the recent results of the investment in the Vision Fund?

Segars: The way the SoftBank group is organized, the business is run separately. Im running Arm. Rajeev [Misra] is running Vision Fund. Masa is running Sprint. Theyre separate companies. Im not spending my days worrying about whats going on at Vision Fund, nor is Rajeev, who runs the Vision Fund, spending his days worrying about what Im doing. My primary focus is on delivering an Arm strategy.

The SoftBank group board, as you can imagine, is pretty interesting, and its a fascinating experience for me being part of that. The Vision Fund is going to do what it needs to do.

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Simon Segars interview Arms CEO on competitive threats, custom instructions, and a far-off IPO - VentureBeat