Chip designer ARM is set to acquire US silicon firm Artisan Components, to gain more technology to provide system-on-a-chip (SoC) products for the IT industry. The move could strengthen UK-based ARM's position as a major source of chip technology for embedded and mobile devices.

"Artisan represents an excellent strategic fit with our vision to become the architecture for the digital world," said ARM chairman Robin Saxby. Under the terms of the agreement, ARM will acquire Artisan for $913m, most of which will be in the form of ARM stock.

ARM produces processor designs that are used in chips from firms such as Intel, Texas Instruments and Philips, and the ARM architecture is widely used in mobile devices such as PDAs and smartphones. Artisan, based in California, specialises in designs for specific components that are optimised for particular manufacturing processes, such as embedded memory, standard cell libraries, input/output, analogue and mixed-signal components.

The acquisition should enhance ARM's ability to meet its licensees needs. "As system design complexity increases, so does the need for stronger links between all aspects of SoC development, from library elements to advanced microprocessor IP and software. Combining forces with Artisan will enrich and expand our total IP (intellectual property) offering," said ARM chief executive Warren East.

The post-merger firm will also be able to reach more customers - chipmakers and device manufacturers - with a broader product portfolio, ARM said.

System-on-a-chip (SoC) refers to the integration onto a single piece of silicon of most or all of the key hardware components necessary to implement a device such as a smartphone. Typically, this means combining a processor with a number of peripherals, such as communications hardware and circuitry to drive the display.

The acquisition will be subject to regulatory approval and the agreement of shareholders of the two firms, but is expected to be completed before the end of the year.