HEXUS.sharewatch: SoC companies lose out

There were some interesting developments in the SoC (system on chip) sector last week, but they seem to have been received negatively by investors.

On Wednesday, UK embedded chip designer ARM announced it was lowering the barriers to entry to the SoC market by launching two ‘hard macros' of its Cortex A9 design.

We speculated at the time that this didn't seem like good news for the likes of Qualcomm and NVIDIA, which have both invested a lot of money creating their own SoCs using varying amounts of ARM IP, as this will, in principle, create more competition for them. So we're not surprised to see both their share prices buck last week's upward trend and lose some ground.

More surprising, if the assumption is that ARM has created an additional revenue stream for itself, is the drop in ARM's share price too. Maybe investors decided the potential risk to its existing relationships outweighed any benefits ARM might get from new sales.