NVIDIA being a well known hostile company, the industry did not miss the news about its ARM purchase intent. And thus they looked for alternatives. That's RISC-V.
Today, pretty much every company designing microcontrollers or SoCs is involved with RISC-V. They won't cancel those efforts to embrace ARM again.
That's actually an interesting side-effect. What happens to ARM now?
New players who are looking for a long-term strategy are looking at RISC-V (as you note) in part due to Nvidia's reputation. Despite the deal being quashed, they're probably going to continue along that route.
However, it seems like ARM licensees might also be making plans to become less dependent on ARM (the company). The Nvidia/ARM deal was announced September 2020. Qualcomm announced that it was going to buy Nuvia (founded by ex-Apple Silicon people) in January 2021 along with plans to launch their own internally-designed CPUs (rather than relying on ARM reference designs). I think this is a smart plan regardless of the Nvidia/ARM deal, but creating your own cores means that ARM has little-to-no leverage over you. You don't need their new CPUs. Sure, ARM still updates their architecture periodically, but you can happily continue along making your own CPUs under a perpetual license. Qualcomm is making the jump to its own cores so that it doesn't need ARM reference designs.
SoftBank is somewhat souring on ARM since it isn't getting the huge returns it was expecting by owning the CPU that everyone was going to use in the future. Will SoftBank end up short-changing R&D at ARM making their reference cores less competitive with Apple Silicon and future Qualcomm cores?
Even if SoftBank was able to sell ARM for $40B, they bought the company for $31-32B in 2016. Basically, the sale meant only 5% annual returns which is pretty bad compared to the huge gains an index fund would have made during that time. I think there's going to be pressure to find a way to squeeze money out of ARM.
Heck, with Qualcomm moving away from ARM reference cores, that's a lot less revenue for ARM. Even if Qualcomm cores aren't better, Qualcomm is still a huge portion of the mobile CPU market. Every ARM CPU maker that starts making their own custom cores means less revenue for the reference designs and less reason for ARM to invest in those reference designs. If ARM starts reducing investment in their reference designs a bit, that will put pressure on more companies to create their own custom cores.
The sky isn't falling and I don't want this comment to sound like that. I think ARM has a fine, sustainable business. At the same time, it seems like there will be pressure from SoftBank given the lackluster returns even with the Nvidia deal and Qualcomm buying Nuvia puts further pressure on ARM and it's hard to justify a major investment in something that is likely to continue having lackluster returns.
> it seems like there will be pressure from SoftBank given the lackluster returns
If the rumor Softbank wants to IPO ARM is correct, there will be pressure to get all the fundamental metrics of the business pointing up and to the right to maximize the valuation of the IPO. The increased proceeds from a good ARM IPO vs just an 'okay' IPO would likely swamp any potential cash that Softbank might be able to milk from ARM in the short-term.
It will be interesting to see how much of ARM Softbank intends to offer in the IPO vs how much they might continue to hold.
I spoke with ARM employees last summer and although it was not mentioned aloud, it was obvious the process had been started the make the bride pretty for the IPO.
Another concern is which regulators are going to allow such a sale to take place? As noted in the article, the FTC filed a suit against the merger and China was likely to take a similar stance. If NVIDIA cannot buy ARM without running into anti-trust issues, who reasonably could? Any tech company that a) has the capital and b) has the interest would almost certainly run into the exact same problem.
I think an IPO might be the only exit strategy Softbank has for ARM.
I foresee ARM becoming the commodity big box datacenter CPU but who really knows
Apple will probably mess with it for 10 years like they did PowerPC until industry comes up with something totally new and revolutionary and then we will see a convergence on consumer devices across the board to whatever that is.
> Basically, the sale meant only 5% annual returns which is pretty bad compared to the huge gains an index fund would have made during that time.
You talk about the $30b case as if a retail is taking higher risk/return portfolio but putting the entire $30b is not the same as buying something that looks promising with your phone.
If you can't fill the $30b into an asset, it's at 0%.
Everyone that wants an arch license has one (Intel, AMD, Apple, QC, Mediatek, Broadcom, Marvel, Huawei, Samsung, etc) and doesn't have to put down cash, they can just poach ARMs best chip designers away from them. ARM gets to strangle the $10 landfill router market until RISC-V takes over.
Intel has a 5 year plan started last year to take back the number one spot in performance, efficiency, and fab capabilities. Its ambitious, but certainly not impossible. Apple is currently top in efficiency with M1 and TSMC's 5nm manufacturing, but Apple has lost talent and Intel is fabbing with TSMC now too (TSMC is building Intel an entire 3nm plant).
Apple aside, laptop and desktop sales are still x86's to lose, so unless both Intel and AMD take major stumbles, I dont see ARM shipping in much more volume in PCs than it does now.
I wonder if we will see Intel expand big time into more embedded industries (like they already are with vehicles) and then use that additional cash to buy out ARM and make integrated dies with both types of cores. A desktop or laptop CPU with both x86 and ARM cores for different uses (and maybe even high performance virtualization embedded at the hardware level) could be interesting - especially as more operating systems gain good support for both architectures.
Sad memories of Nokia. The N9 debuted to great reviews and was built on a promising tech stack that continues to outlive it today (Qt, etc.). Repeated takeover attempts and intent by Microsoft, and finally installing an ex-MS VP who cancelled the platform internally before an actual sale to Microsoft, was too much of a distraction.
It's hard to survive a bodged takeover attempt, much less an actual takeover.
Indeed. It believe they are a victim of false management decisions (happens). Windows as a mobile system was already on its way out, it seemed they wanted to keep it in the race by buying into Nokia. That said the phones now sold under the Nokia brand are pretty decent.
IPv6 is working so well that people often miss the fact it's being used all over the world. Which is probably the greatest endorsement for consumer side IPv6.
ARM’s business is just fine, they’re a healthy company with fantastic technology and happy customers. Maybe they were overvalued by SoftBank, but that’s Softbank’s problem. It doesn’t mean ARM is a bad business. They’re just not growing spectacularly, but maybe that’s ok.
The British should try to coax Softbank into doing an ARM IPO and work to build up a more significant native semiconductor ecosystem around the company. It might be Britain's last chance at that, a company like ARM doesn't come around very often and you need something integral like that to build around as a core. The US should tandem with Britain on that (investment, political support, whatever is needed), given the close nature of the allied relationship (and since if the US can't own it the next best thing might be for Britain to continue to indefinitely).
ARM has I think 2/3 of it's employees in the UK, mainly Cambridge, and they're expanding the campus there. The Semiconductor Physics Group at the Cavendish Laboratory at the University is at the cutting edge globally with 18 PhD projects currently in flight. Guess where scads of ARM's top scientists are recruited from? ARM and the University are joined at the hip. That company's not going anywhere.
SoftBank wants to do an IPO. They have no financial reason to hold on to all of ARM or even a majority of it in the near to medium future. Likewise, SoftBank def doesn’t want to put any money into ARM any more.
I think it’s reasonably clear SoftBank’s stewardship of Arm has been poor - sure they have invested but the Arm China move backfired badly and this Nvidia uncertainty has also hindered Arm’s development.
I think Apple should buy ARM. Then they will own the entire iPhone and Mac tech stack -- right down to the ISA. It's hard to think of a more competent steward for the technology than Apple.
That would make even more companies bail from ARM to RISC-V than NVidia. While NVidia tends to be hostile and lay out traps for competition, Apple downright shuts down anything external facing of the companies they acquire. Just as the parent is saying, that would make ARM less valuable, for sure.
NVIDIA being a well known hostile company, the industry did not miss the news about its ARM purchase intent. And thus they looked for alternatives. That's RISC-V.
Today, pretty much every company designing microcontrollers or SoCs is involved with RISC-V. They won't cancel those efforts to embrace ARM again.