ARM licensing fee increase could drive some customers to competitors

Shawn Knight

Posts: 12,376   +121
Staff member
Recap: SoftBank partially decided to buy ARM to put itself in position to take advantage of the forecasted boom in the Internet of Things. Unfortunately for SoftBank, IoT hasn’t advanced quite as rapidly as some experts anticipated and with the pandemic continuing to play out, it may take even longer for those plans to get back on track.

ARM is reportedly looking to milk additional revenue from some of its customers in the form of higher licensing fees.

Also read: How ARM Came to Dominate the Mobile Market

Sources familiar with the matter told Reuters that ARM’s sales reps have called for price hikes that could increase the overall licensing fee charged to some clients by a factor of four. Unsurprisingly, the talks have reportedly prompted some licensees to look for more affordable alternatives.

ARM is a semiconductor design firm that licenses its technology out for use by some of the world’s most successful companies including Samsung, Nintendo and Sony. Just last month, Apple announced it would be replacing the Intel processors in upcoming Macs with custom silicon based on ARM’s technology.

Japanese multinational conglomerate SoftBank purchased ARM for around $31 billion in late 2016. The following year, a 25 percent stake in ARM was moved to the Vision Fund, SoftBank’s venture capital fund that has been hit hard by investments in Uber and WeWork.

Earlier this week, The Wall Street Journal reported that SoftBank was exploring a potential sale or IPO for ARM. Goldman Sachs was brought on to advise the firm, the publication added.

Image credit: Gorodenkoff, Karol Ciesluk

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Uncle Al

Posts: 7,203   +5,588
Sounds like another business form of "craps" ..... you pay your money and you takes your chances .....
 

yRaz

Posts: 3,337   +2,814
It's not shocking; now that companies have begun to get locked into ARM, is it *really* shocking they'd increase licensing fees?
Sounds like another business form of "craps" ..... you pay your money and you takes your chances .....
well it was bought by another company that decided to raise prices on a product they didn't develop. ARM's strength was how it was cheap and easy to develop for. I bet in a few years we'll start hearing about an arm replacement
 

ColdSoup

Posts: 46   +101
well it was bought by another company that decided to raise prices on a product they didn't develop. ARM's strength was how it was cheap and easy to develop for. I bet in a few years we'll start hearing about an arm replacement
Guaranteed ARM is dead in the water if they do a 4x fee increase. Some businesses will stomach that for a few years while replacements are developed to get back down to closer to original costs.
 

grumblguts

Posts: 309   +273
UK Gov should of stopped this 31 billion take over.
With more than 4,500 granted or pending patents, ARM is an intellectual property powerhouse.
The people who made the patents still exist and continue to make new innovative products not part of ARM there is that at least.
 

bexwhitt

Posts: 476   +182
UK Gov should of stopped this 31 billion take over.
With more than 4,500 granted or pending patents, ARM is an intellectual property powerhouse.
The people who made the patents still exist and continue to make new innovative products not part of ARM there is that at least.
Expecting a Tory government to do that would be optimistic.
 
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Rayneofpayne

Posts: 162   +179
Apple: Forget about the announcement of ARM-based Macs. We're moving to our own cores.
It's not as simple as that, it's still on a level of engineering to an ARM spec even with a customized Core it would be the same as Tegra, they would still have to pay the license fee, unless they designed a CPU from the ground up which is damn near impossible with patents.
 
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quadibloc

Posts: 178   +104
Two obvious replacements are available for most ARM customers: RISC-V and PowerPC. So I presume the 4x fee increase will be targeted at the one market that is truly locked in: smartphones. Now that IBM has opened up the PowerPC architecture, is it too late for Apple to consider using that architecture for Apple Silicon?
 

candle_86

Posts: 404   +299
Two obvious replacements are available for most ARM customers: RISC-V and PowerPC. So I presume the 4x fee increase will be targeted at the one market that is truly locked in: smartphones. Now that IBM has opened up the PowerPC architecture, is it too late for Apple to consider using that architecture for Apple Silicon?
Shouldn't be, just dust off some code last touched a decade and a half ago.
 

candle_86

Posts: 404   +299
Why would they create a competitor to themselves? They would rather sell their own CPUs.
They could do a cross license and restrict Samsung to mobile under 2-3w chips, Intel has abandoned the quark anyway and it helps Intel if mobile runs on x86
 

zamroni111

Posts: 28   +12
UK Gov should of stopped this 31 billion take over.
With more than 4,500 granted or pending patents, ARM is an intellectual property powerhouse.
The people who made the patents still exist and continue to make new innovative products not part of ARM there is that at least.
Then it will be called Royal Semiconductor 😁
 

Markoni35

Posts: 687   +232
Immediately after Apple decided to ditch Intel and use their own ARM-based CPUs, and Amazon introduced ARM-based servers, SoftBank decided to rise the licensing fees. Surprise, surprise...