Report: ARM is for sale and Nvidia’s interested, Apple isn’t

https://arstechnica.com/gadgets/2020/07/reports-arm-is-for-sale-and-nvidias-interested-apple-isnt/

by _JamesA_ • 6 years ago

226 176 6 years ago

starfallg2• 6 years ago

The antitrust implications of an ARM sale to any one of the tech giant is massive and may drag on for a while. It would be probably be quicker if Softbank floats ARM through an IPO.

humps3• 6 years ago

Nvidia acquiring ARM wouldn't pose much of a problem because they can just point to AMD, which already offers CPU and GPU, so it would put the two companies on a more even footing in that regard.

AWildC1822• 6 years ago

That only really holds water at a cursory glance though... Nvidia owns ALL of video and then some, AMD only owns a (growing) tiny fraction of CPU and happens to have a couple cards. It's not just about markets but market share.

znpy2• 6 years ago

intel also sells cpu and gpu, technically.

sitkack2• 6 years ago

There has been no meaningful antitrust action in over a decade. I wouldn't bank on it.

ben_w• 6 years ago

A little over a decade ago, a lot of stuff went wrong because a bunch of economically dominant corporations figured they were too big for governments to allow them to fail.

And it looks like big tech is developing much the same rich-and-out-of-touch reputation that bankers and stock traders used to have.

I don’t know who, but I am assuming one of the FAANGs will be forcibly broken up in the next decade.

adventured• 6 years ago

The parent is referring to the blocking of an acquisition. There have been many examples of that type of action on the basis of competition concerns. The Justice Dept and FTC routinely try to block acquisitions where there are competition concerns. They don't always win, as in the case of AT&T / Time Warner (or in the case of AT&T / T-Mobile, they did successfully prevent that). Some other examples: Anthem & Cigna, Sabre & Farelogix, Edgewell & Harry's, Office Depot & Staples, Sysco & US Foods.

snapetom• 6 years ago

Yep. They call it out.

"ARM is so widespread that buying it will be a regulatory nightmare, and even the most lenient rubber-stamp regulators around the world must shudder at the idea of an existing ARM licensee buying ARM. "

Practically all of Apple's product line will be powered by ARM in the near future. Buying ARM would put them at a huge advantage while heavily influencing the chip IP of competitors. I can't imagine regulators in the US and EU not raising an eyebrow at this.

Despegar• 6 years ago

The most likely outcome for ARM is that it goes public again rather than being bought out.

2bitencryption• 6 years ago

can someone explain how ARM as a business works?

My understanding is, they design the specification of the ARM assembly language, and the design of the hardware (not individual chip fab but like... abstractly, somehow?)

But if they specify the design of the hardware, why would one chipmaker have faster/better CPUs if they are using the same spec as another chipmaker with slower/worse CPUs?

What's the business model? Do they get paid per ARM chip sold, or yearly for the rights to sell ARM chips, etc?

deepnotderp• 6 years ago

Some companies (eg Apple) have an ARM architectural license, which gives them the ability to design custom microarchitectures, but using the same ARM ISA.

Kipters• 6 years ago

I don't know exactly how compensation works, but they have basically two products:

- The ARM ISA (the "specification")

- A series of chip designs implementing such ISA (the Cortex series)

Customers can either license the Cortex design to implement in their own silicon or license the ISA and design their own CPU (like Apple did). There isn't one single Cortex core, but many of them at different performance/price points

derefr2• 6 years ago

Why exactly does one need to license an ISA? AMD doesn't license x86 from Intel, AFAIK.

What's the IP that Apple would otherwise be infringing upon if they didn't license? The "ARM" trademark?

catalogia• 6 years ago

From what I understand ARM designs and licenses some chips but also licenses the right to design chips implementing the same ISA. So not all ARM processors are designed by ARM.

ksec2• 6 years ago

Do they get paid per ARM chip sold, or yearly for the rights to sell ARM chips, etc?

Both. Basically at the top end You have licensing that big companies like Apple pay a large one-off sum ( comparatively large from ARM's perspective , but tiny in Apple's view ) for the use of ARMv8. ( i.e You will need to pay again for ARMv9 or ARMv7 ), and do custom design with the Instruction Set as along as it remain compatible with ARMv8. At the bottom end you are simply buying a blueprint from ARM, add some other IP you want and pay per ARM chip.

Anandtech has an article [1] about it and most of it are still relevant.

Since we are taking about business It is also worth mentioning the revenue of ARM before Softbank acquisition was less than the Net profits of Intel.

[1] https://www.anandtech.com/show/7112/the-arm-diaries-part-1-h...

klodolph• 6 years ago

…and the design of the hardware (not individual chip fab but like... abstractly, somehow?)

Keep in mind that I am NOT well-informed about this and I may say some wrong things.

https://www.arm.com/why-arm/how-licensing-works

From what I understand, ARM will give you various different implementations of different ARM cores, depending on the licensing terms. My guess is that this includes:

- RTL optimized for simulation

- RTL optimized for synthesis, maybe with variants for FPGA vs ASIC

- Various lower-level implementations, complete with layout. Just a “block” that you drop onto your chip design. I imagine that these are something like “here’s a block that you can give to TSMC for their 16nm process”

microcolonel2• 6 years ago

They sell basically three things: rights (and some specifications) to design your own chips with their interface, rights to use their core designs in your SoCs, and services related to those two things.

What's the business model? Do they get paid per ARM chip sold, or yearly for the rights to sell ARM chips, etc?

Either or both.

pjc50• 6 years ago

why would one chipmaker have faster/better CPUs if they are using the same spec as another chipmaker with slower/worse CPUs?

That's not the interesting thing, really. ARM licensees don't compete on how fast the ARM itself is, they compete on what else is on the same chip that they've designed themself. Radios, high-speed serial interfaces, analog-digital, etc.

(the big exception is Apple, who have their own silicon team improving the ARM implementation)

ARM have a very wide range of price/performance/area/power options. You don't always want the biggest and best.

beefok• 6 years ago

Typically fabless CPU/MCU companies design and implement netlists to these CPU designs. It includes all of the logic to implement the CPU. This netlist/VHDL/Verilog design is the protected IP they sell, as well as the rights to re-use, etc.

The IP itself can be placed into semiconductor fabric and combined with many other parts such as peripherals, flash memory, sram, etc.

AWildC1822• 6 years ago

I wonder if softbank sees the writing on the wall here. Yea they want cash but ARM is rapidly coming under fire from the open source RISC-V architecture. ARM's licencing model in particular is steering people away from their offerings in new designs and I think they're pretty much at peak value right now with Apple's adoption of their architecture.

I know there aren't tons of news articles about new high performance chips being offered but where I work we are seeing a ridiculous level of interest from other companies particularly given our industry...

sitkack2• 6 years ago

I am a huge RISC-V fan, like Cathy Bates level, but there is so much that ARM can do over the next 5,10,15 years but it looks like they are incapable of the required transformations. Everything that is good about RISC-V is already at ARM's disposal.

Currently it looks like SiFive was borne out of a solution for the organizational issues that plague innovator's dilemma companies. I am envious of SiFive's position right now. I hope they don't get swallowed by a dinosaur.

The only reason NVidia wants ARM is because they can't have an x86 license.

Apple doesn't care because they probably have an escape/hedge clause on their ARM license and they will soon be shipping an IR. They have ISA hopped so many times it is old hat to them.

dividedbyzero• 6 years ago

What is an IR?

gaze• 6 years ago

I'm curious if ARM sees RISC-V as serious competition. I'm under the impression that the instruction set makes efficient and performant implementations rather difficult.

ljhsiung• 6 years ago

My personal view is that, for the next few years, no. There are some pretty critical features that RISCV is missing that makes ARM what it is today and so very prolific in your phones and desktops and even, recently, servers. Many hypervisor or virtualization and to some extent security extensions just aren't there for RISC-V, and on top of that, the software ecosystem isn't really all there yet for high performance.

Currently though, RISC-V already is ingrained heavily in the embedded and IoT space and growing astronomically. That's where ARM is losing heavily, although in my opinion, the embedded space wasn't the money maker anyways for ARM

jagger27• 6 years ago

I don’t know if this is right. The money seems to be in customized Arm-based chips for now and I think for quite a while still. Apple and Nuvia might take Arm to crazy new levels with their customizations but all their chips will still be Arm at their core, which seems to be a pretty nice place to be in for SoftBank. Surely once Apple blows the doors off everything else more new licensees will follow, no? I think Arm has a lot of growth left in it, even if RISC-V takes off.

chvid2• 6 years ago

How relevant is ARM in the long run if Apple is pursuing its own design / CPU architecture ("Apple Silicon") and the Chinese lead by Huawei are forced by US sanctions also to create their own design / architecture?

nightfly• 6 years ago

ARM will continue to be relevant for embedded stuff for a long time.

ryanmarsh• 6 years ago

ARM is the IP house for the ARM architecture. Control of ARM means control over all the IP (lots of patents) for ARM based processors used across many industries in many devices.

You can imagine what might happen if an anti-competitive player controlled the major competing architecture to x86.

"He who controls the spice controls the universe." etc, etc...

ksec2• 6 years ago

Apple is still using ARM. And benefits greatly from the ARM ecosystem from compiler to software compatibilities. Having their own design doesn't mean they dont rely on ARM. No idea about the 2nd part of the question though.

formerly_proven• 6 years ago

Doesn't Apple have a perpetual license to their current ISA anyway? And it's not like Apple would need external help to refine/develop the current ISA.

Alupis4• 6 years ago

The number of units Apple sells with ARM designs inside (all devices - desktops, laptops, tablets, phones, and more) are dwarfed in comparison to the ARM ecosystem at large. ARM isn't dependent on Apple for anything really.

Even your toaster and fridge probably have ARM licensed designs in them. Your Smartwatch certainly does, and the billions of non-Apple smartphones too.

Chinese lead by Huawei are forced by US sanctions also to create their own design

Pretty sure they were heading that way even without US sanctions. Steal the IP, then make a competing product while paying zero licensing fees to ARM.

p1mrx• 6 years ago

Pretty sure they were heading that way even without US sanctions. Steal the IP, then make a competing product while paying zero licensing fees to ARM.

Huawei would be in a better long-term position if they chose RISC-V versus IP theft.

chvid2• 6 years ago

Or let me ask in different way: why use ARM if you control and build the whole stack from electronics to operating system to the software running on it?

The core instruction set is from the 80es. Surely you can come up with some better today were you to design it from scratch?

Alupis4• 6 years ago

Surely you can come up with some better today were you to design it from scratch?

Ya, but then you have to develop and support the entire ecosystem around just the instruction set. That means compilers, languages, runtimes, and more - which is not a trivial undertaking.

Perhaps Apple could pull it off, but it would take a very long time to get something entirely new stable enough, and performant enough, to compete with anything being offered today.

Plus, it's not Apple's focus and doesn't really benefit them much either. Nobody builds iOS apps in assembler - but they expect it to run fast. That takes a very well tuned compiler, and a very well refined CPU architecture.

mjw10072• 6 years ago

The 64-bit ARM ISA was basically redone from scratch, around 2010.

It isn't "mostly the same instructions but with 64-bit registers" the way 64-bit x86 is.

nicoburns• 6 years ago

why use ARM if you control and build the whole stack from electronics to operating system to the software running on it?

Why not use ARM if the alternative is to build an entire software stack from scratch. ARMs licensing fees are very reasonable, and then you get most of the free software ecosystem for free.

wronglebowski• 6 years ago

Is regulation really that big of an issue?

I realize all the tech companies in the running and ARM are global brands. Recently T-Mobile and Sprint were allowed to merge in the US. Is it really that certain that Apple or another giant purchasing ARM wouldn’t be allowed?

ChrisSD• 6 years ago

It's not certain but it is a big risk. Nobody wants to be spending time and money on doing a deal when there's a high risk it'll be blocked at the final hurdle.

smabie• 6 years ago

T-mobile and Sprint were allowed to merge because they were both uncompetitive as stand-alone companies: their merger deconsolidated the wireless space, not the other way around.

tmaly• 6 years ago

If ARM is so important, surely the government would give consideration to have an American company own it.

I am surprised that Intel in not in talks as a bidder.

ID1452319• 6 years ago

ARM is British before it was bought by SoftBank

Alupis4• 6 years ago

I am surprised that Intel in not in talks as a bidder

I'm surprised too, but can't help thinking Intel would be the worst possible steward of the ARM ecosystem. Back to the same-old anti-competitive Intel practices of the 2000's...

For what it's worth, I kind of have the same feeling about Nvidia too. I think the best stewards of ARM IP would be an organization that is fully invested in seeing ARM dominate... not an organization that's just looking to add ARM patents to it's warchest.

klelatti16• 6 years ago

Not 100% sure which government you're referring to here but a polite reminder that ARM, although owned by Softbank, is still a British company with its HQ in Cambridge UK and design centres around the world including the US. I'm sure many US companies would be fine owners of ARM but it doesn't have to be owned by one to secure its future and that of the architecture.

Intel would a) not be allowed to buy for very clear antitrust reasons b) as owner would be very likely to be a disaster for both Intel and ARM. Intel has had ARM licenses in the past and has sold the relevant businesses.

manuelabeledo2• 6 years ago

Intel has quite a record on screwing up anything ARM related. They bought StrongARM from Digital, then tried manufacturing their own ARM based chips (XScale) for around five years, to finally sell the whole business to Marvell.

On top of that, their mobile business lines are and have always been weak.

aleppe7766• 6 years ago

A wide coalition must form: every single OEM acquiring ARM will reduce its value. BTW Apple won’t let Nvidia control a central part of its Long term hardware strategy.

jki275• 6 years ago

I don't know the details of Apple's licensing agreements, but note the fact that the word "ARM" is totally absent from all their marketing. They own their own chip design company (PA Semi), we know they're using the ARM ISA, but I suspect they don't need anything from ARM the company anymore.

jupp0r• 6 years ago

Just keep in mind that the major use case for ARM is embedded systems: washing machines, smart refrigerators, car electronics, barbecue thermometers, medical devices, lawn mowers, you get the idea. Mobile phone or computer companies would not be interested in dealing with that part of the business.

lliamander3• 6 years ago

True, but x86 also got it's start in (relatively) low-end systems (PCs) and eventually overtook high-end CPUs from the bottom. ARM looks to be in a position to do that.

znpy2• 6 years ago

one might argue that a long time has passed and the world, the industry and the market are all very different, though.

cpeterso2• 6 years ago

Intel is already losing desktop market to ARM with Apple's Mac transition from Intel to "Apple Silicon" (ARM).

Cheap RISC-V CPUs seem to have a much brighter future than ARM for consumer appliances like washing machines than have slim profit margins and don't need compatibility with other devices.

agumonkey• 6 years ago

Just the other day I found an stm32f4 in a device (I think some kenwood talkie), I didn't except such a strong processor but here it was, arm is in a lot of places.

solarkraft• 6 years ago

How can anyone not be interested in owning ARM?

Whoever controls that company can decide who's allowed to make processors that run consumer facing software (sure, RISC V might present a threat in the long term, but it's a good decade out).

Of course that would be a nightmare for every other licensee (which is why I'm hoping for the IPO), but the potential gain is immense, isn't it? Or are the licenses so nice they're safe regardless of who owns the company?

numbsafari• 6 years ago

One word: antitrust.

anoncareer0212• 6 years ago

your 2nd sentence is a zen answer to the first sentence

reminds me the old Eric Schmidt quote about how YouTube was cheap because it was expensive - had a ton of legal liability and a ton of engineering work required to meet the needs of rights owners

jpalomaki• 6 years ago

$32 billion price tag might be a turn-off for many.

Getting a new home from non-neutral buyer might cause licensees to start looking for alternatives.

imtringued5• 6 years ago

There is no value in owning ARM for its licensees other than engaging in non competitive practices against its other licensees. That means you need to have 32 billion dollars to burn with the expectation of never getting them back in a way that can be attributed to the ARM acquisition. The potential gain is pretty slim because the only way a licensee can extract value from the purchase is by destroying ARM which negates the entire purpose of an acquisition.

ETHisso2017• 6 years ago

Why doesn't TSMC buy ARM?

sys_64738• 6 years ago

ARM Holdings is the IP licenses it sells is it not? I don't think ARM Holdings does HW design, or do they?

AlphaSite• 6 years ago

Are also sells actual cores and blocks. They do a lot more than just the arm spec.

nabla9• 6 years ago

They do. ARM Holdings is ARM Ltd.

simonebrunozzi• 6 years ago

I would never want to buy ARM if I were Apple. Here's why.

Apple can design AND manufacture chips based on ARM architecture, essentially without any interference from ARM the company. Just pay a (relatively small) license fee and you're all set.

The article says it well:

Arm’s licensing operation would fit poorly with Apple’s hardware-focused business model.
There may also be regulatory concerns about Apple owning a key licensee that supplies so many rivals.

I think it's important not to confuse the success of a specific architecture, with the economic success of the company owning and licensing IP related to that architecture. These two things might not necessarily go hand in hand.

Edit: two very relevant comments in the parent thread, I'll just mention them here for completeness:

the revenue of ARM before Softbank acquisition was less than the Net profits of Intel. (from https://news.ycombinator.com/item?id=23930895)

True. As mentioned above, architecture success != economic success

Risc-V (from https://news.ycombinator.com/item?id=23930814)

Absolutely relevant. I am bullish on Risc-V and think there's a good chance we will all eventually converge to that.

toyg2• 6 years ago

True, but losing influence on the core component you've pivoted your whole company around, would also be pretty disastrous.

Or in memespeak: scenes when nVidia controls Apple's CPU roadmap.

blinkingled3• 6 years ago

Nothing stops Apple from giving no craps about ARM CPU roadmaps though. They could just license what they need and build a completely custom everything on top without needing it to be a standard implementation in anyway. So long as whoever is buying ARM is legally mandated to provide licenses - Apple doesn't have to rely on them actually pushing out new CPUs/modules/features.

Historically I think they have just licensed the ISA and built their own thing on top. Maybe they needed the Big.Little stuff in the past but for the future they seem to be confident enough not to need anything from ARM or do it themselves.

keanebean86• 6 years ago

Or Nvidia raises the license fees to crazy levels. Maybe the contract terms prevent that? If not that would cause some big problems for a few years as companies scramble to find alternatives or design in house.

manuelabeledo2• 6 years ago

True, but losing influence on the core component you've pivoted your whole company around, would also be pretty disastrous.

It doesn't seem to have hurt Apple in any of their past transitions.

The fact that Apple could improve their vertical integration by switching to their own silicon, doesn't mean that they need to control every single aspect of it. That rarely happens.

Also, any move by Nvidia to specifically hurt Apple would be not only detrimental to their own business, but likely an easy target for a lawsuit.

dathinab2• 6 years ago

They likely have existing binding contracts with ARM, due to which they don't have to worry about that.

dathinab2• 6 years ago

But without buying ARM they might be able to replace ARM with their completely own thing.

But due to regulations around monopolies they likely will have problems if they end up with this after buying ARM.

It also isn't as profitable as Apple, so Apple stack holders might not like it. Even more if Risc-V takes over things might not be that good for ARM so it's another liability for Apple with like not that much benefits.

skohan2• 6 years ago

Is there a risk NVIDIA could change the licensing terms to ARM's detriment?

dgellow• 6 years ago

Do you mean Apple’s detriment?

simonh• 6 years ago

True. As mentioned above, architecture success != economic success

ARM is enormously economically successful, they're just not a manufacturer and thus not remotely a comparable business to the entirety of Intel, fabs and all.

Apple has a perpetual license from ARM, so it doesn't matter who buys ARM, Apple is all set license wise.

There is a risk that a new buyer might under-invest in the evolution of the architecture and future core designs. This is a small but real risk for Apple because they do base their cores on ARM designs. I've seen the argument before that the only thing Apple uses is the ISA, but that's flat out not true. They customise and tune the design sure, but the basic architecture comes from ARM. The secure enclave, for example, is an ARM design. Lack of investment in that core ARM architecture would be a problem.

On the other hand, it would equally be a problem for all the other ARM licensees, many of which are current direct Apple competitors. For this reason such a risk seems manageable from an Apple perspective. They are in a much better position to compensate for under-investment by the owner of ARM that most of their current competitors.

The exception in Intel, because Apple is soon be a direct competitor of theirs in the desktop and laptop CPU space. Hence my use of the work 'current' in several places above. Ultimately though, Apple seems to be on top of their CPU design game. They're already beating the living pants off their competitors on mobile, no threat there whatsoever, and very well placed to beat Intel on desktop/laptop. Underinvestment in ARM would be in inconvenience, but not an imminent threat.

RISC-V is interesting, but I think there's a lot of wishful thinking happening around it. Most of the really interesting RISC-V chips include proprietary enhancements. Theres a serious tragedy of the commons issue going on there that is already a problem, and that issue isn't going away. The sheer amount of talent and money ARM and their licensee ecosystem, including Apple, Qualcomm, Amazon, etc are throwing at the problem simply can't be matched by the ecosystem around RISC-V.

tadfisher• 6 years ago

Most of the really interesting RISC-V chips include proprietary enhancements.

100% of ARM chips on the market include proprietary enhancements. I don't think that has any bearing on the adoption of the core ISA, unless you can point to cases where a decision was made to avoid RISC-V over licensing an ISA extension.

moonchild• 6 years ago

I am bullish on Risc-V and think there's a good chance we will all eventually converge to that.

I'm very hopeful for the mill. I think they have a good 15-20 years left to get their stuff together before we can definitively say they've succeeded or failed. Barring that, though, riscv is quite nice. 'Specially the vector instructions—so much nicer than simd.

WhatTheFrick• 6 years ago

What do you guys think could be the implications for employees who may or may not be finding out about this sale through HN rather than internally?

toyg2• 6 years ago

It's been rumored for a week that SoftBank is pondering a sale, but the fact that SB is hurting for cash has been common knowledge for a while now.

McP• 6 years ago

I'm sure they'll be incentivized to do their best to push the sale price up ;)

Zenst• 6 years ago

Apple license the instruction set and make their own designs, so the interest in all that overhead business, let alone the political fallout (too much power in one company and fuels the Apple TAX headline mantra that will just roll and roll) - Apple don't want that hassel.

But many reasons Apple buying ARM is not a good fit for Apple.

Nvidia may well be good fit and a better fit than Apple by far, though would it be best if ARM is owned by some company or publicly listed?

If I was Softbank, I'd go for IPO route as I do feel out of all the IPOs, this is a mature tech firm. That makes this one that will be popular on many levels, let alone the number of Geeks who will want an ARM share certificate upon their wall.

laurencerowe• 6 years ago

If I was Softbank, I'd go for IPO route as I do feel out of all the IPOs, this is a mature tech firm.

ARM is definitely mature, it originally IPO'd in 1998 and remained public until it was bought by SoftBank in 2016.

evilelectron• 6 years ago

Why is Microsoft not interested? Or they are and it has not been reported?

ARM should fit well with them, plus it would give them a way to enter the mobile space again, this time by owning the IP and not making hardware.

klelatti16• 6 years ago

I suspect there is a bit of a Catch-22 with any sale.

Purchase by any ARM customer (including Nvidia) potentially reduces the value as it will alienate other ARM customers who compete with the buyer (e.g. AMD holds ARM licenses so how would it feel about using Nvidia controlled technology). Yet who else will be able to generate synergies from the acquistion?

Of course Nvidia may feel that the synergies are big enough to offset the loss of business plus its share price gives it a fantastic acquisition currency.

Plus, the line when Softbank bought ARM was that ARM as a listed company was constrained by lack of cashflow, so a deep pocketed owner would be able to take up opportunities not available to ARM as as stand-alone company.

protomyth2• 6 years ago

I'd believe IBM before Nvidia or Apple. IBM has chip engineering knowledge and IP licensing know how, but doesn't have to worry about a conflict with the licensees.

H8crilA• 6 years ago

Nvidia's stock is in a massive bubble, so an all-stock transaction is a no brainer here. They will be getting ARM for free.

starfallg2• 6 years ago

Softbank and Vision Fund aren't exactly looking for Nvidia shares though. They are looking for cold hard cash to plug the massive hole in the failing investments.

BbzzbB2• 6 years ago

I think Son is looking for the next big thing, probably something about shared workspaces.

basch• 6 years ago

I've been thinking about this "stock is a bubble" with regard to Nvidia and Tesla. Normal investing logic says to pay attention to P/E.

However, if you look at stock as its own currency, basically dollars*managementskill, putting a dollar into Nvidia or Tesla basically means "if I give this money to someone else, they can do better with it than if I hold onto it. It would also be a way of "investing" in a management team, helping support them financially so they can go out and make acquisitions.

Then Nvidia and Teslas stock price becomes less "a bajillion times their next five years of earnings" and more "what could these great teams buy or build if we pump them full of cash." Youre investing more than just the future of the current company, as it exists right now.

I don't see Softbank wanting Nvidia stock though, unless they intend to liquidate it quickly.

ChuckMcM2• 6 years ago

Interesting article. I wonder what is really happening.

Looking at moves by Chinese vendors and others, I'm going to hypothesize that ARM said to itself:

"We can't compete with 'free' and RISC-V is 'good enough' that its going to wipe out the commodity micro-contoller licensing stream that is over 50% of our revenue. That means we won't have the resources to invest in designing higher end features in the high margin parts and we're going to die. We should sell now, take our cash, and let the buyer eat the future losses."

I don't know of course. I'm an outsider like most people. But I have been part of, and then watching the semiconductor industry since about 1984.I was personally on the "inside" at the development of the SPARC architecture, and watched it grow, and die, as it was mismanaged by Sun. And I've been associated with American high tech companies for more years than I care to remember :-) and have seen a bit about how such companies survive, grow, and fail to grow. A common theme is that there is a "cash cow", a product that has exceptionally high margins relative to its "class" and that revenue funds the R&D that does the "innovation" work. These businesses live or die on finding "the next thing" before their cash cow dies. Failing to find that thing, as SGI did, as Sun did, and as I think Google is in the process of doing, starves the company of the cash to pay the innovators as they focus more and more on keeping the cash cow alive for longer and longer. The company essentially morphs from a mission of doing cool new things, to one that is preserving the 'one thing' at all cost. That thing eventually dies in spite of their efforts and what is left of the company is bought by a healthier company for its assets and maybe a couple of its projects that were cool, but not good enough to replace the cash cow.

If I am correct, this is the right move for ARM, and a really risky buy for anyone who would buy them now. A smart buyer, knowing how this will evolve, will wait for the desperation to set in so that they have maximum leverage in the acquisition.

And another thing that will be true (if I am guessing correctly here) is that RISC-V is going to really take off and have lots of people making them for cheap.

Google234• 6 years ago

RISC-V still seems overhyped to me. It would be nice to see working examples being used competitively.

jacquesm5• 6 years ago

It is work in progress on a very impressive trajectory.

jacquesm5• 6 years ago

ARM management has historically been anything but clueless, they must have their reasons for putting it on the market and yours is as good as any that I've seen.

RISC-V is a serious threat to their business model. In a way this is good, CPUs and the surrounding IP should be a (free) commodity, just like operating systems and utilities.

klelatti16• 6 years ago

I'm not a CPU designer but if I were I'm not sure I'd agree that CPUs and the associated IP should be free. I think we all benefit from the effort of those who push forward CPU design and they deserve to be paid for it.

I'm with you if this means that CPUs should be a collaborative effort with shared overheads and common standards but ARM is pretty close to this already.

klelatti16• 6 years ago

I understand the attractions of RISC-V and hope it does prosper but I'm not sure that it's 'free' to the extent that seems to be assumed. Some implementations are open source but others are not and someone has to do the work (and in most cases get paid for it).

Chinese firms may rush to RISC-V but given the geopolitics (e.g. Huawei) I can easily see barriers being put up in the US and elsewhere to cheap chinese RISC-V chips being used everywhere.

ChuckMcM2• 6 years ago

A couple of things I've noted:

Western Digital adopts RISC-V [1]

Microchip's new push [2]

Analysts covering the microprocessor marking making some pretty big projections [3]

[1] https://riscv.org/2017/11/ee-times-article-risc-v-spins-driv...

[2] http://ww1.microchip.com/downloads/en/DeviceDoc/00002911A.pd...

[3] Semico Research estimated that there will be 62.4 billion RISC-V cores shipping in 2025. It’s not just for microcontrollers, Asanovic said. There is demand for every performance level. -- https://venturebeat.com/2019/12/11/risc-v-grows-globally-as-...

cpeterso2• 6 years ago

Seeing the writing on the wall, perhaps ARM could use their expertise to design and sell proprietary RISC-V instruction set extensions. This is the classic Innovator's Dilemma, a hard pill for ARM management to accept. (See Intel and Xscale.) ARM management would probably need to firewall RISC-V development in a subsidiary company.

bfuclusion3• 6 years ago

The day a RISCV SOC on par with the Raspi 1, is the day I never buy another ARM board. It'd be nice if the whole SOC is open cored like the CPU, but I'll take what I can get.

klelatti16• 6 years ago

Genuine question. Why is this the case? What would a RISC-V board enable you to do that you can't do with an ARM board today?

chubs• 6 years ago

The open-source RISC-V core 'SonicBoom' aka 'Boom v3' has a claimed IPC that beats the ARM generation in the raspi4. It's only on FPGAs currently though. All it needs is someone to make them as real chips! It's really something interesting i think.

naves• 6 years ago

What if it gets acquired by a Chinese fund/conglomerate?

trasz2• 6 years ago

Which might have been the best possible outcome from the global point of view.

throwmemoney• 6 years ago

The problem with ARM is when a customer asks to add a single new instruction, ARM say yes sure, that will be $10M+ please dearest customer.

No wonder everyone is jumping the ship over to RISCV.

Soft Bank did not do its due diligence, did anyone at SoftBank hear of RISCV before buying ARM in 2016?

The writing was on the wall since RISCV ISA was made open source.

slim2• 6 years ago

I wouldn't invest in ARM if they can't sell to Chinese companies

greatjack613• 6 years ago

Why not?

slim2• 6 years ago

it seriously limits it's growth

commandlinefan• 6 years ago

I never was able to figure out why ARM was so much more popular than MIPS. ARM always felt unnatural to me.

smallnamespace• 6 years ago

Given how semiconductors are becoming a battleground over national security, trade, and technology between China and the US, what are the chances this would be delayed by Chinese regulators or used as a bargaining chip over trade war negotiations?

The Mellanox deal was delayed for months by the Chinese competition authorities, and ARM is a far larger and more important player in the space.

dangjc• 6 years ago

ARM should just go public and IPO. Why do companies rely on acquisitions so much? Let the public buy into these successful tech companies instead of having the gains accrue to already rich tech companies or private equity funds.

gsnedders2• 6 years ago

ARM IPO'd in 1998; they were publicly held till acquired by SoftBank in 2016.

baybal2• 6 years ago

If I were AMD, I would've done just anything to prevent ARM going to a single vendor in their ecosystem, Nvidia particularly.

dwild• 6 years ago

I did a quick CTRL+F and found no mentions of Oracle. There's no way they wouldn't be interested in ARM. I sure hope someone else buy it though, Nvidia could be nice.

fischert• 6 years ago

The situation seems pretty fucked-up with China CEO Allen WU refusing to leave after being fired. https://www.electronicsweekly.com/news/business/arm-china-as...

Report: ARM is for sale and Nvidia’s interested, Apple isn’t

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