The strategy they are using to establish a revenue stream that justifies this valuation is to continue to raise prices on their customers. I think this works in the near term (next 5 to 10 years), and generate a ton of money for ARM, but it will drive additional momentum to RISC-V.
The legendary Jim Keller is going all in on RISC-V, if you don't know Google him. His company has many core designs coming as well chiplets: https://tenstorrent.com/risc-v/
Because of Jim Keller and similar efforts I wouldn't be surprised for RISC-V to see both core count as well as per core performance meet ARM over the next few years. Maybe even exceed if Jim can push the chiplet approach faster than ARM can roll theirs out.
Hopefully this drives a lot of innovation and we all benefit as a result.
I think that using ARM is going to be viewed as being locked into ARM's ever increasing licensing fees, where as if you go RISC-V, you are free to switch CPU providers.
> where as if you go RISC-V, you are free to switch CPU providers.
Idk, this really isn't as true as you'd think. Yes RISC-V is an open and free ISA which will cut out some fees, but you'd still have to license IP/chip designs (if you can't make your own) and they could only undercut ARM by a little bit. Further, the lack of mobility across chips/boards/whatever is not usually from the ISA, but from the BSP, SDK, etc. so you still would have substantial lockin unless we somehow standardize on that (lol)
Part of the issue here is that nobody is going to build something free on top of someone else's property. What good is a "free" design if you still have to pay ARM?
Whereas once you have a free ISA which is actually in widespread use, you could get some designs out of universities or major corporations which intend to use them rather than sell them as their primary business and then release the design for the same reason they do for Linux code, potentially under a copyleft-style license.
Those designs aren't going to be competitive with the state of the art, at least in the beginning, but they don't have to be. All they have to be is low power enough to stick in an embedded device and fast enough to run the display on a refrigerator and the lack of a license fee would cause them to replace a zillion ARM chips that currently go into every IoS device and <$200 phone and consumer internet router. That's a huge chunk of ARM's market.
Then someone like Amazon evaluates this thing for something like the Kindle and finds that it's almost good enough, all they have to do is throw a couple of engineers at it for a short period of time, so they do and it gets released because what do they care of some non-competitor uses it in some cheap laptop. Commoditize your complement -- now laptops are cheaper and people buy more laptops on Amazon.
Meanwhile the "small project" uncompetitive boards start to have their own open source BSP and SDK under the BSD license, which means anybody else can fork it for their own thing, and that's a competitive advantage so it happens a lot. But now it's way easier to reverse engineer the code because 95% of it is unmodified, so you start getting community replacements for that stuff and with any luck the OEMs stop even producing it and point you to the open source repository.
It could be a long time before that takes over the high end, if that ever happens, but the low end? It's almost inevitable. And the high end is AMD64 and Apple, the latter of which has all the leverage in the world over ARM because they could always switch to RISC-V.
> Whereas once you have a free ISA which is actually in widespread use, you could get some designs out of universities or major corporations which intend to use them rather than sell them as their primary business and then release the design for the same reason they do for Linux code, potentially under a copyleft-style license.
We've had open ISAs for decades. The problem isn't with ISA licensing, the problem is cost-of-entry.
Most people have a computer...it costs nothing to install Linux and GCC/rustc/Python/etc and start contributing to open source software. For open hardware, you need (at minimum) a decent FPGA for testing/development; but access to fabrication resources to be in anyway competitive.
Don't get me wrong, I'm generally pro on RISC-V; I just don't think it's the revolution everyone is making it out to be.
> Most people have a computer...it costs nothing to install Linux and GCC/rustc/Python/etc and start contributing to open source software. For open hardware, you need (at minimum) a decent FPGA for testing/development;
That wasn't even true when open source got started. Typical access was to expensive mainframes and VAXen available only in universities and major corporations. PCs were only starting to become a thing and most people didn't have one.
That model still works if you need something expensive. Get your university to buy one, or your company if it will save them $0.05/unit on the millions of devices they sell. Or you rent one in the cloud.
You also might not need your own. A project gets started by someone who does have access to a decent FPGA, you want to contribute to it, great. They give you remote access to the FPGA.
Meanwhile FPGA prices keep going down.
> but access to fabrication resources to be in anyway competitive.
Which is available to anyone, if you have customer demand. They've made millions of Raspberry Pis.
> That wasn't even true when open source got started.
Which is why it took off when computers became accessible; and continued growing with even further ubiquity.
> You also might not need your own. A project gets started by someone who does have access to a decent FPGA, you want to contribute to it, great. They give you remote access to the FPGA.
Cool, so we're back to bottlenecked accessibility.
> Which is available to anyone, if you have customer demand.
Not hobbyists. To reiterate, open hardware (including ISAs) is as old as open software.
You're delusional if you think either are anywhere equivalent.
> Which is why it took off when computers became accessible; and continued growing with even further ubiquity.
So things like FPGA prices going down over time or being available to hobbyists via cloud providers.
> Cool, so we're back to bottlenecked accessibility.
Anyone with a computer and an internet connection can contribute, all they have to do is send an email to the project maintainers. It's obviously not as good as everybody already having the hardware, but it could be good enough to actually make it happen.
> Not hobbyists.
The model would be that there is a public repository with a design in it, anyone can contribute, and then every year or two they do a freeze and a production run which anyone can buy including the hobbyists who made contributions.
It feels like your argument is that Debian can't exist because a hobbyist doesn't have the resources to build a whole operating system. One doesn't, but a million of them do, especially if they can start with a basic design released by a major corporation or university or government.
As a layperson though, how would I be able to tell whether any of this is true? When I have to target platforms as a software developer, the truth is, I’ll do whatever Microsoft and Apple tell me to. By the time Apple is shipping a RISC-V phone I hope to be retired!
> As a layperson though, how would I be able to tell whether any of this is true?
You probably won't ever know. Do you know the architecture of the microcontroller on your first computer's hard drive? I don't.
The stuff that RISC-V will replace first is the low-margin hardware that can be mass-produced by China et. al and exported without license violation. ARM's goose was already cooked in this sense, and even ARM China won't fix it. For IO controllers, ICs and network switches, it's hard to see why manufacturers would stick with higher-margin ARM hardware. If RISC-V cores are cheap, stable and available, you could replace them without the user ever noticing.
> By the time Apple is shipping a RISC-V phone I hope to be retired!
Apple holds a rare Architecture license to the ARM ISA due to their role as a founding partner, and can make original implementations without incurring licensing dues, as they do with the A and M series CPUs. I understand why they would want to switch to homegrown designs instead of licensing ARM reference designs (which they do have to pay for), but why migrate instruction sets too when RISC-V doesn't save them any marginal cost over novel ARM designs that would be binary compatible with the existing firmware?
> Apple holds a rare Architecture license to the ARM ISA due to their role as a founding partner, and can make original implementations without incurring licensing dues
Sorry, the architecture license wasn’t a thing when Arm was founded and there is no way that Arm would hand out free licenses at a later date. It’s just a myth.
"We have entered into a new long-term agreement with Apple that extends beyond 2040, continuing our longstanding relationship of collaboration with Apple and Apple's access to the Arm architecture," - ARM's IPO Document.
I assume they paid something for it, but who knows how much, ARM and Apple have not decided to tell us.
Western Digital announced an open source core ("SweRV") in 2019, so I assume they already use them now that we are a few years on from that announcement.
For any kind of high-level code, "platform" is something like win32 or Android or Qt. The underlying hardware architecture is the compiler/interpreter's problem.
The people dealing with assembly know who they are, but much of that is the sort of work that cares a lot about shaving off a few cents worth of license fee for an embedded device.
For users of general purpose computers this is caused almost entirely by closed-source software. Most of the architecture-specific code is part of the operating system, and by the time you're doing an architecture transition the OS itself runs on the new architecture. The third party applications largely aren't dependent on a specific architecture but they're compiled for one.
With open source you could just recompile for the new architecture. Linux has always run on just about every one under the sun and the user largely can't even tell the difference. But if you don't have the source code you can't do that.
Closed-source systems could avoid this by compiling to bytecode, which is essentially what Android does, so transitioning to RISC-V would be much less trouble there than it would be for e.g. Windows.
Honestly, this is conjecture at best, there have been other open ISAs that didn't manage to capture the market like this. That isn't to say I don't think RISC-V will capture a lot of market share, but I'm not going to make specific predictions about how much and where.
Of course it's conjecture. If you know anyone who can reliably predict the future I'd like to meet them.
But previous open ISAs were in the wrong market segment. Okay, SPARC is open, but it's also Oracle and no one trusts them, and the existing SPARC ecosystem is the enterprise market which expects big, hot hundred-thread systems and has no use for a simple dual-core CPU at 800 milliwatts. But that's the thing you can produce with a low budget, so it never goes anywhere or no one even makes one.
People are starting to use RISC-V for the thing where that actually works.
MIPS wasn't opened up until they were already dead, and then almost immediately threw in the towel and joined up with RISC-V.
PowerPC basically the same, not opened until after it was irrelevant. OpenPOWER is in the same enterprise market as SPARC and IBM is not far from Oracle on the "do not engage litigious bureaucracy" chart.
MIPS didn't really open. They made a big deal about it, but it turned out to mean something to the effect of 'we'll open more of our build system to partners who pay for a traditional MIPS license. No third party MIPS cores. No general release of MIPS RTL.'
ARM actually has a pretty good story for how they can undercut RISC-V prices in that they can design the ISA rather than accepting the decisions of a committee. That committee used to make good choices, but things like the vector ISA seem more suspect.
The general consensus I've heard is the vector extension is good? I do agree the design by committee is less than ideal, but the ability to add vendor extensions at all is nice for certain markets.
You're not wrong, but having two choices of supply does wonders for squeezing profit margins from both back to the customer. Duopolies are terrible but better than monopolies.
Especially when your lifeline is tied to Apple. No way are they going to negotiate to raise prices in a meaningful way against their largest client.
Actually>
"Apple (AAPL.O) has signed a new deal with Arm for chip technology that "extends beyond 2040," according to Arm's initial public offering documents filed on Tuesday."
They have an architectural license (for Arm v8/9) because they are a huge customer with deep pockets not because of a shareholding they sold a decade before that architecture was announced!
It's not the deep pockets per se, but the hand Apple had in designing AArch64. Apparently their relationship with ARM is more like the Intel/AMD relationship, ie. cross-licensing.
The deal with apple is probably 0.1% of revenue from all hardware sales that contain ARM IP or something similar.
Which means that if Apple decide to switch to RISC-V to save money, the deal is still in effect, but no money will be paid, so there might as well be no deal.
Yes. For ARM, having apple as a customer is a massive investor and customer confidence boost.
For Apple, they won't offer much because they could develop their own CPU architecture ISA pretty easily (they control all code and compilers for the platform after all, and already employ lots of compiler and CPU developers).
> No way are they going to negotiate to raise prices in a meaningful way against their largest client.
Why not? It's not like Apple will have anywhere else to go for the next 8 years. x86 cores are too slow and power-hungry for the foreseeable future, and building their own risc-V core will take... at least 8 years.
Unity IPO’ed three years ago. Their stock is down 80%, common among tech stock since money printer stopped. However now their plan to turn the tech company to cash cow and milk existing customers seem to have backfired.
A lot of games can not just drop Unity quickly. So a bunch will be forced into paying Unity. Also remember Apple just made Unity "the way" for making full screen VR apps on their new VR device. Don't underestimate how much Unity can make this way... while a lot will drop Unity many games simply can not in the medium term.
I think everyone in this thread underestimates this part of ARM's business (from the F-1):
*
Expand our System IP and SoC Offerings. To enable further improvements in performance and efficiency, we continue to develop a broader set of configurable systems IP offerings, including proven on-chip interconnect, security IP, memory controllers, and other design IP to be used with our processors, including the integration of multiple IP technologies into a subsystem and additional information to assist in fabrication. More recently, we have invested in a holistic, solution-focused approach to design, expanding beyond individual design IP elements to providing a more complete system. By delivering SoC solutions optimized for specific use cases, we can ensure that the entire system works together seamlessly to provide maximum performance and efficiency. At the same time, by designing an increasingly greater portion of the overall chip design, we are further reducing incremental development investment and risk borne by our customers while also enabling us to capture more value per device.*
ARM doesn't just give you the architecture, they give you a reference design that already works and then lets you customize it however you want.
Companies like Apple don't care about that, but MediaTek, NXP, etc. use it to speed the design process meaningfully.
ARM already does that though. Their dev systems like the Juno boards are ARM designed chips with ARM IP through and through covering just about every accelerator and integration niche. CPUs, NoC fabrics, GPIO, sound, just about every hardware interface master and slave, AI inference, display scanout, etc.
Integrators don't typically go all in on ARM IP though for a couple major reasons. 1) They want to provide some value add beyond the standard offerings or else why pick them over a competitor? 3) They have massive collections of IP blocks already that they don't have pay ARM for. Maybe it takes some engineering to convert to the next chip, but that's probably cheaper than what ARM is asking for.
It's less than you would think. Despite having offerings in about every IP block segment about the only ARM IP blocks that get heavy use are the pieces that have some other ecosystem thing going on. PL011 uarts are de facto required for some initial consoles. Mali GPUs were being sold in what was frankly a move that needed some anti-trust scrutiny (ARM saw Apple taking the piss out of IMG and decided to go in for the kill by offering CPUs+GPU for cheaper than CPUs on their own, overnight destroying IMG's market). Beyond that it's easier to not pay ARM for their IP. NoC fabrics and IP blocks that touch pads are better coming relatively straight from the foundry. Simple serial controllers are essentially commodities at this point. Etc.
So RISC-V really only needs to focus on CPU cores to be an existential threat to ARM.
At this point their biggest most is probably the patents on AMBA specs, but if they tried hard to enforce those the industry would switch to something like TileLink in a relative heartbeat.
I am giving RISC-V 5 to 10 years to catch up in my estimates. I think that is fair. The momentum behind RISC-V is massive and even then I am not saying it is fast.
5 years is a flash in chip design. Initial design to tape-out is 3 years at the leading edge if you're really good.
Maybe in 5-10 years, RISC-V gains share in initial designs, but the semiconductor design process is loooong.
And if you're going to talk about Microcontrollers and simpler chips, keep in mind we had a bunch of other RISC architectures a decade ago that all lost to Cortex-M for simplicity/cost reasons (RIP MIPS).
I think RISC-V eats ARM's lunch at the low end across the board over the next 5 years. Financially that is okay in the near term for ARM as the major profits are all in the high end designs.
But all that will be left in a few years is the high end areas and where there is a lot of lock in to the ISA.
It isn't yet clear when RISC-V will be ready to compete at the highest end of things, but that is where Jim Keller comes in.
RISC-V is a classic market disruptor for ARM, just as ARM was a disruptor to Intel.
> if you go RISC-V, you are free to switch CPU providers.
That's not even true within the ARM ecosystem itself. The chips from Infineon are not source-code compatible with STM, STM is not compatible with Microchip, Microchip is not compatible with TI...
The problem is that the ARM core is just a portion of the architecture. Everything on top of that - GPIO, memory interfaces, timing, etc - is vendor specific, and will stay that way for RISC-V. RISC-V is just an instruction set architecture (with some appendages), not a blueprint for a complete CPU / MCU / SoC.
Not to mention, the chips also won't be electrically-compatible. Your hardware architecture can be as daunting to redesign as the code, if not more so. There's a reason why we try to do as much as possible in software, after all...
An open source ISA isn't the same as a design. They are radically different, in order to use an ISA you need IP design. The companies that are gaining ground with RISC-V are all largely IP vendors, which is exactly what Arm is. It's just shifting where the dollars go.
I like the idea of an open platform centered around an open standard - I don't know enough about the subject but I wonder if RISC-V is viable as a complete product?
Like, if we ignore the chip design aspects - is it guaranteed software compiled on one RISC-V chip will run on another RISC-V chip? (in the same way it does on ARM and amd64/x86?
What about hardware interoperability? PCI? UEFI/Boot semantics? Power management?
Who enforces that stuff for arm and x86 platforms?
Building out tooling and even chips based on RISC-V is handing the future to China. They’re going all in because it’s an ISA that the west generated and builds support for but is free to use, which plays into their strengths of lowest cost and their ambition to own the future chips of the world.
You are right that China is going on in on RISC-V in part because of Western sanctions. It is yet another reason why RISC-V has so much momentum. It is in China's interest to destroy Intel's and ARM's competitive advantages and it is pouring money and people into it.
An architecture that's developed in public that anyone can implement is a funny way to achieve that. Particularly given that western firms do largely follow the IP rules, if China wanted an ecosystem they controlled, surely they'd develop their own proprietary one (or worst case, buy out one of the western also-rans).
The point being that the west has already accepted it and is building tooling for it, yet it’s free. So they can’t be embargoed, but they can embrace, extend, and extinguish with massive subsidies and incentive.
Our first family computer was an Acorn Archimedes, we had it for maybe a year before it was replaced by a PC with an Intel.
Now here we are 30 years later and I'm typing on a laptop running on a ARM (née Acorn RISC Machines, then Advanced RISC Machines), I have an ARM in my pocket, another in a tablet in my bag. My wife is next to me on an ARM laptop, she's also got an ARM on her arm... we're listening to music on a wifi speaker running on an ARM. There are probably 30-40 ARMs in one way or another around our house. Amazing really.
I cut my teeth on an Acron Atom in 1982, and upgraded to a BBC Micro (a renamed Acorn Electron) the next year.
But, yes, I never would have thought that, 40 years later, most of the CPUs in my house would still be derived from that scrappy British's company's designs.
One of my favorite examples of the benefits of public interest spending and investment. There very likely wouldn’t be an ARM today if it weren’t for the Micro.
About 10 years ago, my partner turned to me and said, there is an ARM core for every person on the planet. Her company was designing printer chips and using ARM cores. They bought the reference design to use. "Arm and a Leg" they nicknamed it due to high fees even back then.
I bought some "Armh" (ARM's old ticker symbol) which did really well before they got bought by softbank. Oddly hard to find any info about historical stocks on the interwebs.
I wouldn't go that far. Apple's strategy in a lot of cases is more like that of automobile manufacturers where they invest heavily in a company as sort of a king maker, but then hold them over a barrel on later margins with the threat that they can make another king. That's what they did with TSMC, pre purchasing chips to the tune of ~$15B which allowed TSMC to go ahead and buy a bunch of the first EUV steppers.
Here's a list of companies that can be bought for $50b:
Valero Energy. Profit: $10b. [valustox.com/VLO]
DR Horton home builders. Profit: $5b. [valustox.com/DHI]
General Motors (!). Profit: $10b. [valustox.com/GM]
Aflac Insurance. Profit: $5b. [valustox.com/AFL]
Nucor steel. This one is selling for only $40b. Profit: $5.6B. [valustox.com/NUE]
Microchip Technology Inc. Also $40b. Profit: $2.4b. [valustox.com/MCHP]
Arm has it's work cut out to raise their profits from the rumored $1b. I'm not sure why an investor would consider them without a strong plan to 10x-100x their profits when there are companies selling at a similar rate but making much more money in boring product categories. Hope they can do it while staying true to their mission.
It was disappointing for the UK not to get a dual listing, despite Rishi Sunak's best attempts. I guess Europe is just not attractive enough for capital from the rest of the world for IT investments.
It would mean you can buy and sell ARM shares on more one stock exchange.
One basic rule for making money as a country is to ensure capital flows through your country (e.g., services, manufactured goods, FDI, etc). Then skim off some of the captial that flows.
If ARM were listed in the UK and say, $30b of shares is traded anually, of which say $10b is in the UK, then some of that will go to UK ltd.
What incentive would ARM have to do that, though? Just so the UK can "skim off some of the capital" (which is a very generous way of describing what's actually occurring).
They're a UK company based in the UK. It's preferable that any skimmings stay within your own country isn't it? But obviously the top people would decide on whatever would personally benefit them the most.
Technical question: why do people need ARM licenses? Surely you don't need anything from them to design a chip from scratch that implements the same instruction set, as Cyrix and AMD famously did to the ia32.
Are the licensees using parts of the actual chip design? Are their own designs too far down the "derivative work" rabbit hole due to not being cleanroomed that they have no hope of ever not licensing?
The ISA isn't very useful IMO, outside of the compiler framework.
The crux of modern chip design is the tradeoff in MHz, peculiarities of Tomasulo's Algorithm (out of order buffers, tuning sizes and number of pipelines, etc. etc.).
Lets take an example: should you have 200 64-bit words in the reorder buffer, or should you have 800 (Apple M2). What's the tradeoffs? How much slower does accessing the reorder buffer get when you need to go from 8-bits to 10-bits to address the various locations?
How many multiplication units should you have? I know Intel has 3 of them per core, is that enough? Or do you go IBM Power route and go for like 20 pipelines wide?
Etc. etc. etc.
ARM Neoverse N2 makes a lot of these decisions, packages them up into an easy moniker ("General Purpose"), and also has customizations towards V-cores (higher performance but bigger) vs E-cores (lower-performance but smaller and more power-efficient).
You then make decisions based off of the core as a whole, rather than designing a core. Ex: do you use 128kB of L1 cache? Or 64kB? Do you do L1 / L2 / L3 cache like Intel? Or do you do L1 / L2 cache like Apple?
You still need to make these "uncore" decisions, including the important MESI (core-to-core communications: Modified data vs Exclusive data vs Shared data vs Invalid data). Even _IF_ you buy an off-the-shelf core like Neoverse N2, you're no where close to finishing an actual chip yet cause the darn thing can't even talk to RAM yet.
ARM uses a mix patents, copyright and trade secret protections for their ISA. The give you the RTL/vhdl/verilog for the core when you license it and they forbid you from changing the core in the license agreement to use it.
You can clean room implement the trade secret part, but the patents would be an issue and ARM could still sue and drag things out.
You also could never legally call it ARM because it's trademarked. This makes it harder for semiconductor vendors to sell chips.
See the Qualcomm lawsuit shitshow which is now causing Qualcomm to invest big in RISCV.
Yeah, for hard layouts that the vendor has already done, that is true. Either way, it's transferred encrypted and protected so you can't screw with it.
You also don't need anything from your architect to design a building from scratch. But unless you're an architect yourself, it's going to be prohibitively difficult, or even impossible. So people hire architects.
> Surely you don't need anything from them to design a chip from scratch that implements the same instruction set, as Cyrix and AMD famously did to the ia32.
Cyrix and AMD had licenses to do so, ultimately deriving from a time when Intel needed second sources of their CPUs in order to win defense contracts.
Originally Cyrix did not license from Intel. Intel sued for patent infringement and lost badly enough they had to give Cyrix a few million to settle their counter claims.
Cyrix has also sued Intel over their Pentium chips. In the end the results of all the lawsuits are cross-licensing deals.
In order to get the contract for the IBM PC, Intel had to agree to have a second-source manufacturer for their CPUs. Intel already had a relationship with AMD so it made sense to use them.
Patents, lots of patents. A lot of them are expired. By now you could make an 80486 and I guess also a Pentium clone without worrying about patents. But there can also be patents on how you make something performant on modern silicon, so it's not only about the ISA.
> Surely you don't need anything from them to design a chip from scratch that implements the same instruction set, as Cyrix and AMD famously did to the ia32.
> Early 1980s--IBM chooses Intel's so-called x86 chip architecture and the DOS software operating system built by Microsoft. To avoid overdependence on Intel as its sole source of chips, IBM demands that Intel finds it a second supplier.
Comment on the timing of this IPO: for a company to IPO "unfavorably" compared to previous valuations likely means ARM's hand was forced by timing considerations, unless they are running out of cash, which I don't think is the case.
My interpretation of this is that their investors suspect that whatever boost ARM is getting from AI optimism will likely peak soon, so the timing has to be now.
I know that's not fully rational because they're mostly unrelated, but certainly the optimism because of AI has to be good for them. Curious to see if this "signal" plays out - investors tend to be pretty savvy about timing.
> I know that's not fully rational because they're mostly unrelated, but certainly the optimism because of AI has to be good for them. Curious to see if this "signal" plays out - investors tend to be pretty savvy about timing.
The "investors" are SoftBank; they've been pretty much the stupidest money in the world for years.
While it's possible that they're being more savvy about the timing of this sale than about their investment decisions, I don't know that it should be the default assumption.
ARM was wholly owned by SoftBank. They did not have their own cash, it was all Softbank’s cash. And obviously SoftBank selling ARM means SoftBank wants to cash out, for whatever reason.
In fact, SoftBank is known for being the one of the stupidest big investors there is. They got lucky being an early investor in Alibaba, but have managed to piss most of that money away on getting left holding the bag on the peak.
I've said it before, and I'll say it again: the weird self-dealing and tiny float that softbank are going for indicate a strong chance that this is going to fall through the floor. Softbank should've learned by now, you can bully the market when you're buying, but you can't bully the market when you're selling. I'd be surprised if this stock weren't down 50% within 12 months. There's too much sell pressure from Softbank and there's no buy pressure.
But they already wanted to sell their shares to Nvidia before, what would have changed now? They want to reduce their ownership of ARM, hence them doing an IPO in the first place.
Regulators stopped a coordinated purchase, which they are totally within their right to do. And if Softbank and NVIDIA try to coordinate a purchase another way, they'll stop that too.
It's not as cut-and-dry if Softbank just puts the shares on the open market, and NVIDIA pays market value for them. Are there reporting requirements around NVIDIA buying stock on the open market? Freeze-out periods? Regulatory delays? If there's collusion it might be a crime but even if you're cynical and refuse to believe that there might not be, you still have to prove it.
"At this price, the IPO is reportedly set to raise about $4.9 billion for Arm’s parent company, Softbank, which is less than the $8-$10 billion the Japanese investment outfit had previously said it hoped to generate. Softbank itself posted a record $39 billion loss earlier this year."
"With the financial world anxiously awaiting the start of Arm’s roadshow in the hopes that Son can reignite the flaccid IPO market, Son has decided that his chip-maker is worth $64 billion because Son agreed to buy a chunk of it from Son for that price.
In so doing, Son agreed to pay Son twice what Son sold it to Son for six years earlier."
I've read that some big tech names are anchoring this IPO: Apple, Google, NVidia.
What's in it for them? Or are they getting a sweetheart deal on their shares of Arm?
They don’t appear to be saying, but the investment makes sense for Apple and Google even without a sweetheart deal. It ensures a successful IPO and continuing viability of their primary chip supplier, and protects it from a takeover by some entity hostile to Apple or Google. Nvidia I’m not sure about though.
Nvidia has been selling ARM chips for years (the Nintendo Switch’s SoC, for example), and they’re currently in the process of massively growing their ARM business with the new Nvidia “Grace Superchips”. Not to mention the expected sales boom of the new Switch 2 SoC that should happen within about a year.
Probably a pump-n-dump onto retail investors to make a quick buck... or they're paranoid and want to retain enough ownership to have some say in the future direction of the architecture... or both.
What I would like to know is why ARM - or its owners - needs the cash. Are there any major projects they are undertaking that justifies this flotation?
Tech valuations are all fairies and unicorns right now. I don’t know what their “actual fundamentals” valuation should be, but actual fundamentals haven’t dictated tech stock pricing for at least a decade.
NVDA forward PE is 42.48, which isn't super crazy relative to other big tech companies (MSFT over 30). I suspect ARM's forward PE is double that ratio (>80).
If NVDA's forward projections are correct, and they can maintain that same growth, then there is still room for upside. Personally, I'm not playing this game of musical chairs because I don't think these valuations are sustainable, but as they say, the market can stay irrational longer than you can stay solvent, so shorting is a terrible idea.
Anyone who is able to reliably predict which stock valuations are actually fairies and unicorns can become insanely rich doing so. With this great insight, surely you'll be a billionaire in 10 years through short selling?
Hah - you got me for a second! But of course, from the doc:
> Fair value is a market-based measurement, not an entity-specific
measurement. For some assets and liabilities, observable market transactions
or market information might be available. For other assets and liabilities,
observable market transactions and market information might not be
available. However, the objective of a fair value measurement in both cases is
the same—to estimate the price at which an orderly transaction to sell the asset
or to transfer the liability would take place between market participants at the
measurement date under current market conditions (ie an exit price at the
measurement date from the perspective of a market participant that holds the
asset or owes the liability).
I remember reading that ARM makes more money from embedded than they do from mobile, but I can’t find this source any more. Does anyone know anything about this? Was this true in the (recent) past but no longer true?
I wonder how well SoftBank did with this IPO. If it was a decent enough return, I’d say it’s good news for new SoCs and chipmakers that want to innovate.
Both cases you link to are about trademarks. Patents and trademarks are unrelated.
"Patent troll" has the connotation of an organization or individual who buys cheap patents and sue other organizations on mostly bogus claims related to these patents, hoping that the other side won't want to bother and just settle the matter. That's not Arm's business model.
They don't just hold the patents, but actively develop the ISA / designs too.
ARM doesn't have a big enough moat to stay static and just troll. There are competing ISAs, some free, and there isn't as big of an lock-in as for e.g. x86.
This feels different to me because Arm is designing these chips. It feels a bit more like a drafting company who draws plans but doesn’t build anything. They don’t just have some loosely defined patent.
The linked articles are about the brand name, Arm, used in a domain. You wouldn’t put “intel” or “nvidia” in your domain name without drawing attention. Maybe we need a moniker similar to x86 to define the arm architecture more generally.
I would add to this that people who make statements like the parent did are woefully ignorant of how the industry really works. Board producers rarely design the entire PCB. PCB designers rarely produce the board. Chip designers rarely produce their chips. Chip producers often do some portion of the design process. And on and on.
Computing is a complex business and few companies do everything in house. ARM's business model of focusing solely on the IP seems to have worked well for them. From the engineering side, it's certainly nice to have the ability to pick and choose which IP blocks we'd like to use and then shop around the design ourselves versus having to battle with Intel to get what we need while trying to poke through the various layers of obfuscation they tend to put in place.
The legendary Jim Keller is going all in on RISC-V, if you don't know Google him. His company has many core designs coming as well chiplets: https://tenstorrent.com/risc-v/
Because of Jim Keller and similar efforts I wouldn't be surprised for RISC-V to see both core count as well as per core performance meet ARM over the next few years. Maybe even exceed if Jim can push the chiplet approach faster than ARM can roll theirs out.
Hopefully this drives a lot of innovation and we all benefit as a result.
I think that using ARM is going to be viewed as being locked into ARM's ever increasing licensing fees, where as if you go RISC-V, you are free to switch CPU providers.