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ARM Holdings chief says its value lies 'in its independence'

Wednesday, 31 Jul 2013 | 11:32 AM ET
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ARM Holdings CEO Simon Segars gets into why he says "competition is good" in his industry because it prompts innovation and reveals his plans to increase shareholder value.

When asked whether his company would like to be bought out by a company like Apple, CEO Simon Segars said his ARM Holdings delivers the most shareholder value by being independent.


"We have to take shareholder value as a prime concern, so obviously we'd have to take [a buyout offer] seriously," Segars said.

But, he added, "the value of ARM is in its independence, in the fact that we service practically the entire semiconductor industry. ... I think given the opportunities in front of us, there is plenty of scope to deliver more value for shareholders by executing on our base business."

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ARM, which designs microprocessors and related technologies, notably to smartphone makers such as Apple and Samsung, is focused on "creating great technology and working with our customers to deploy that," Segars added.

The company's business model is based on a licensing and royalty framework, Segars said, and by creating more value for clients, ARM has been able to increase royalties.

(Related: Apple's new iPhone may have fingerprint sensor)

The royalty rates could rise more, he said, "depending on the mix of technologies," which could include new microprocessors, including graphics and video.

—By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul

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