back to article Qualcomm among queue of suitors chasing a stake in Arm

Qualcomm has reiterated it would like a stake in Arm and help create a consortium that would keep the Brit chip designer neutral, or out of the hands of any single chip company at least. The latest development in the Arm IPO saga comes from Qualcomm's chief executive, Cristiano Amon, who told the Financial Times that his …

  1. Charlie Clark Silver badge

    No foresight required

    Whether Amon had foresight or not…

    ARM has for a long time functioned as a sort of patent pool for licence-holders. Relatively cheap licences have been key to growing volumes. ARM itself doesn't product chips so doesn't compete with licence-holders and the designs leave enough room for chipmakers to differentiate by adding their own customer-specific designs.

    However, coming up with the right kind of governance for a consortium or trust charged with continuing development within a commercial environment won't be easy. And Softbank is going to continue to push for an IPO or sale to someone hoping for a more monopolistic model because Softbank needs the money.

    1. Yet Another Anonymous coward Silver badge

      Re: No foresight required

      The problem is that ARM's model isn't that profitable,

      It can only charge licensees bugger-all% of what it would cost to make their own design or switch to RISC-V.

      Large scale architecture licensees gain most value but pay even less.

      ARM's only value to a buyer is to stop a competitor owning it.

      1. Doctor Syntax Silver badge

        Re: No foresight required

        So unprofitable, according to TFA, that if it were floated in London it would only be the 9th biggest.

        1. Yet Another Anonymous coward Silver badge

          Re: No foresight required

          Profit is not the same as market cap.

          It had an income of $1.27Bn, Softbank are cadgy about it's profitability (adding or subtracting one time sales of 51% to china depending on who they are talking to)

          But even if they have a 50% operating margin - you are paying >$60Bn for a company that makes $500M profit? That's a pretty long term payback if you are doing this purely for the dividends

          1. bazza Silver badge

            Re: No foresight required

            It's too much money for Arm, $60Bn.

            I think that a consortium would be a bad thing. Independent, ARM has an incentive to improve the design, attract customers. In a consortium, it's likely that development will slow, especially if all of Intel, Qualcom, Apple, Samsung, etc all have to agree.

          2. Charlie Clark Silver badge

            Re: No foresight required

            The $ 60 bn is based on nVidia's bid which was, obviously, an attempt to be able to ramp up margins through monopoly. Since then conditions, particularly, in capital markets have changed.

            We have some ideas about ARM's profitability before it was bought by Softbank and this is why the idea of a consortium makes sense: ARM continues to develop chip designs and no one needs to worry about it being bought by the competition. x86, RISC-V should continue to provide the necessary comeptitive impetus to drive innovation. But getting this right is close to squaring the circle™.

  2. pimppetgaeghsr

    Qualcomm has already pent $1.4billion on Nuvia and fully intends on expanding its in-house CPU engineering development judging by the desperation on Linkedin of their recruiters and rumored pay rises.

    That makes them an explicit competitor to ARM even if they are using the ISA. So they will no longer use ARM CPUs or GPUs before long.

    This "consortium" could happily reduce ARM's salary spending to flush out talent to their own org to make themselves "competitive" in compensation or to slow down ARM's development so they continue to stay behind in performance.

    1. DS999 Silver badge

      How does that make them a competitor? Is Apple a competitor with ARM because they design their own chips too?

      Architectural licensees can't license their core designs to third parties so they don't compete with ARM in any meaningful sense. If they only licensed their ARM designed cores and didn't allow architectural licenses Apple would have created their own in house ISA once they started shipping iPhones using their own core designs back in 2012. And the ARM ecosystem would be the poorer for it.

      1. pimppetgaeghsr

        To a certain degree yes, the systems they wind up in compete against each other, and since the performance and efficiency is one of the main selling points.

        There was serious realisation internally at ARM when Nuvia was acquired that maybe the best ARM CPU designers aren't at ARM anymore ;)

        That does not bode well for ARM's overall revenues or engineering teams. The real talent got fed up and went to Apple or various other companies a long time ago, what is left is a highly political company with terrible amounts of dead wood that have worked their way into key positions and able to alienate anything they see as a threat with their pettiness. The only saving grace is they manage to use naive graduates for a few years before they realise what is up and leave for greener pastures.

  3. Doctor Syntax Silver badge

    Given the position of Arm in the industry control by any one business or any consortium in the industry would be problematic. I'd think it would face regulatory scrutiny in the same way that the proposed sale to Nvidia did.

    1. Mishak Silver badge

      Or at least something to ensure that license costs to other users of arm IP are not higher than the equivalent charge to Qualcomm and that IP is made available to all at the same time - which would be hard to establish, and even harder to verify.

  4. FIA Silver badge

    It's a shame there aren't any British billionaires queuing up to buy it, it'd be nice if we kept (or I suppose got back) at least one thing of value we created.

    They could create a holding company for it. Call it Acorn. (It wouldn't need a marketing dept, so it'd be fine).

    1. Chris Evans

      Wishful thinking.

      To afford $60Bn and not worry about the profit you'd need to be in trillonaire territory!

      n.b. Google tells me there are only six people in the world worth more than $100Bn (None in the UK)

      Nice Acorn reference. My business is still nearly all Acorn related after nearly 40 years!

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