Ubiquitous chip promises Arm relevance after Moore's Law palls

Moore's Law states that chip processing power doubles every two years. Bore's Law requires tech pundits to quote Moore's Law regularly to establish their credentials. The law of diminishing returns applies to both. Moore's Law is getting harder to live up to, says Tim Score, finance boss of Arm Holdings. This leaves one pondering how the chip designer will be positioned when its industry has matured.

That day is likely to be over a decade away. Demand for fancier functions dependent on Moore's Law still drives consumer appetite for smartphones, as much as the showmanship of manufacturers such as Apple. The inclusion of Arm designs in devices such as the iPhone 6 helped the company deliver consensus-beating pre-tax profits of $120.5m in the first quarter.

But the proportion of Arm processors destined for mobile gadgets has eased from 60 per cent to about 46 per cent of the total. The rising balance goes to such applications as the internet of things. This refers to chips embedded in machines, not to the internet of Thing, which would involve an orange Marvel character clumsily surfing the web.

Density of processing power should matter less for embedded chips, since the chassis of a driverless car will be less cramped than a smartphone shell. Just as well that the unbundled model operated by Arm - it manufactures nothing itself - gives its chips an apparent pricing advantage over rivals such as Intel, alongside low energy costs. Arm has chosen ubiquity over financial scale for its technology. With this comes greater certainty that, barring a takeover, the business will endure, generating strong numbers as it did on Tuesday.

Goya, an acute observer of human foibles, once depicted two men fighting so fiercely with cudgels they were unaware they were sinking into quicksand. Financiers Nat Rothschild and Ian Hannam risk the same fate as they battle over Asia Resource Minerals, the Indonesian coal miner they co-created. Mr Rothschild may lead a consortium bid for the whole business, following the apparent failure of a board-sanctioned recapitalisation. Mr Hannam is advising an Asian group on a potential rival offer.

Asia Resource has a habit of sucking in people and capital, diminishing both. It was set up in 2010 under the name Bumi and by 2011 was worth £1.7bn. Boardroom battles and a weakening coal price has left the equity with a value of around £85m, less than a tenth of its debt.

On Tuesday, the board called off a vote on a refinancing backed by Mr Rothschild's NR Holdings. Minorities now contemplate the more appealing prospect of competing bids for the whole company. If these materialise, the winner is likely to be selected by Standard Chartered and Raffeissen. The banks control around 24 per cent of the shares each, via loans they made to former Bumi chairman Samin Tan.

A resolution would let Mr Rothschild and Mr Hannam drag their boots from the ooze and pursue calmer careers. Markets generally dispense with bad business ideas cleanly. But in the case of Asia Resource Minerals, the process has been unappealingly messy and rancorous.

Boston department store Filene's once advertised itself as "the hub of the universe". It could regain that status, at least for Primark. The fast-fashion group will kick off a US expansion this autumn by opening a store within Filene's stylish old building. True believers in the shares of Associated British Foods, which owns Primark, have faith that the retail subsidiary will one day be big in America, like One Direction. They can therefore forgive a 4 per cent drop in half-year profits before tax to £450m.

Critics would regard this as proof that Primark is ripe for a solo career, a la Zayn Malik. ABF's dominant business raised operating profits 11 per cent to £322m. But group numbers were gummed up by the sugar division. This slumped to a £3m loss as bureaucrats increased EU sugar quotas and drove down the price of the commodity.

Sticky sugar, combined with the expiry of currency hedges protecting Primark from higher dollar-denominated garment prices, left analysts trimming a few pence off earnings per share forecasts to just under £1. The shares slipped but continued to trade betwixt rival rag traders H&M and Inditex at around 28 times forward earnings.

A demerger of Primark is not on the cards because a charitable trust run by the Weston family controls 54 per cent of shares in ABF. A broker once likened investing in such companies to visiting the founding family: they will make you at home, but you will always know you're a guest. Judging from the share price, minorities are happy to settle in and await rising dividends in lieu of tea and biscuits.

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