I would never want to buy ARM if I were Apple. Here's why.<p>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.<p>The article says it well:<p>> Arm’s licensing operation would fit poorly with Apple’s hardware-focused business model.<p>> There may also be regulatory concerns about Apple owning a key licensee that supplies so many rivals.<p>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.<p>Edit: two very relevant comments in the parent thread, I'll just mention them here for completeness:<p>> the revenue of ARM before Softbank acquisition was less than the Net profits of Intel. (from <a href="https://news.ycombinator.com/item?id=23930895" rel="nofollow">https://news.ycombinator.com/item?id=23930895</a>)<p>True. As mentioned above, architecture success != economic success<p>> Risc-V (from <a href="https://news.ycombinator.com/item?id=23930814" rel="nofollow">https://news.ycombinator.com/item?id=23930814</a>)<p>Absolutely relevant. I am bullish on Risc-V and think there's a good chance we will all eventually converge to that.
Interesting article. I wonder what is really happening.<p>Looking at moves by Chinese vendors and others, I'm going to hypothesize that ARM said to itself:<p>"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."<p>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.<p>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.<p>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.
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.
I suspect there is a bit of a Catch-22 with any sale.<p>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?<p>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.<p>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.
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.<p>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...
can someone explain how ARM as a business works?<p>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?)<p>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?<p>What's the business model? Do they get paid per ARM chip sold, or yearly for the rights to sell ARM chips, etc?
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.
Why is Microsoft not interested? Or they are and it has not been reported?<p>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.
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.<p>But many reasons Apple buying ARM is not a good fit for Apple.<p>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?<p>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.
How can anyone <i>not</i> be interested in owning ARM?<p>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 <i>long term</i>, but it's a good decade out).<p>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?
The situation seems pretty fucked-up with China CEO Allen WU refusing to leave after being fired. <a href="https://www.electronicsweekly.com/news/business/arm-china-asks-beijing-government-intervene-row-arm-uk-2020-07/" rel="nofollow">https://www.electronicsweekly.com/news/business/arm-china-as...</a>
Is regulation really that big of an issue?<p>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?
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.
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.
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.
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?<p>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.
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?
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.
If ARM is so important, surely the government would give consideration to have an American company own it.<p>I am surprised that Intel in not in talks as a bidder.
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.<p>No wonder everyone is jumping the ship over to RISCV.<p>Soft Bank did not do its due diligence, did anyone at SoftBank hear of RISCV before buying ARM in 2016?<p>The writing was on the wall since RISCV ISA was made open source.