Softbank snaps up Vision Fund's stake in Arm ahead of IPO Softbank has reportedly acquired the 25 percent stake its Vision Fund holds in Arm, less than a month before the British processor designer's hotly anticipated initial public offering (IPO). Citing a draft filing as well as everyone's favorite "people familiar with the matter," Bloomberg reports the transaction, which values …
Same man controls both so he can transfer it between the two at any valuation he can reasonably justify. He's trying to set a high price for the IPO, sort of a "see the last transaction valued it at $64 billion so it is worth a lot". He could have just as easily justified the sale at a quarter of the price.
All this means is Softbank think it is worth $64 billion and the Saudis, ahem, Vision Fund investors, think it is nowhere near that. Kind of hard to drive a hard bargain anyway for Masa when he has been suggesting it is worth that anyway. Looks like the Vision Fund got a deal here and don't have to worry about IPO. The only difference here is he is now holding 100% of the stock rather than just a portion of it. So now Softbank are not holding a $40bn company, they are holding at a break-even price of somewhere in the $50+ billion range. With little value added to this stock (remember their IoT nonsense) and the market in a massive AI bubble, how do you convince anyone with money to throw at this stock that a bunch of low power edge devices are going to benefit from the monolithic LLM models that are driving valuations at the moment. I may not agree with it but that is what is driving this years tech rally. ARM was never a growth stock, it is a value stock and with a daily culture that rivalled Twitter pre-Elon Musk there needs to be serious downsizing to get rid of all the jobsworths.
I don't hear too many of Masa's evangelicals singing his praises like they were in 2021. Wonder what changed.
The oft quoted $60+Billion figure is somewhat market inflated:
Nvidia agreed to buy Arm for what Softbank paid for it. The agreement was that it would be partially paid for in Nvidia shares.
When the market saw that Nvidia's play could be a monopoly purchase of what at the time seemed to be the ISA of the future - Tim Cook had just annointed it - then Nvidia's stock rocketed.
Has there been any added value to ARM since 2016?
What there has been, is the arrival of competition, in the form of RISC-V, which is now taking a slice of Arm’s microcontroller market, and threatens other sectors where Arm had hoped to have an unassailable advantage. Big customers of Arm products - Qualcomm, Broadcom and NXP, are now openly looking to advance more performant RISC-V designs.
Add to that Arm's determination to reframe its relationship with OEMs, in order to take a larger share of their profits, and the possibility that OEMs might start looking for solutions elsewhere.
So, Arm needs more revenue to do RnD. Undoubtedly there are companies willing and able to fund that. But will this flotation benefit Arm, or is it money going into Softbank's coffers?
There's a lot of companies looking to move to RISC-V but none of them seem to want to be the ones to share their secret sauce or knowledge, And many of them are practically giving away their designs in the hope of it spreading (Sifive, whom are full of academic leaders that don't care so much for a thing called profit).
'What there has been, is the arrival of competition, in the form of RISC-V, which is now taking a slice of Arm’s microcontroller market,' - citation needed I think. People have TALKED about it a lot which is what you do if you want a better deal from Arm, but how many design wins? How many shipping products with RISC-V in? There's a couple but Arm is still heavily dominant.
At the Embedded World conference last year, Calista Redmond, CEO of RISC-V International, announced that the number of cores in the RISC-V market had exceeded 10 billion: https://pocketmags.com/linux-format-magazine/october-2022/articles/1196448/risc-v-hits-milestone
I can't give an accurate or comprehensive breakdown, but I"d suggest that that's a conservative estimate, since compnies don't need to disclose that they're using the ISA at all.
Famously, Nvidia said in 2017 that they had designed RISC-V microcontrollers:
https://abopen.com/news/nvidia-turns-to-risc-v-for-rc18-research-chip-io-core/
Western Digital too:
https://abopen.com/news/western-digital-releases-swerv-risc-v-core-source-code/
Qualcomm were incorporating RISC-V controllers from 2019. At the end of last year, they announced that they had shipped 650million.
https://www.ccsinsight.com/blog/risc-v-reaches-a-turning-point/#:~:text=Qualcomm%2C%20known%20for%20its%20Arm,microcontrollers%20in%20its%20Snapdragon%20range.
Samsung started using RISC-V in 2020, but I haven't seen any figures there.
https://www.anandtech.com/show/15228/samsung-to-use-riscv-cores
'Research chips' aren't shipping.
Source code definitely doesn't count.
Qualcomm is this year still 'getting involved in' a joint venture to make RISC-V chips -https://www.qualcomm.com/news/releases/2023/08/leading-semiconductor-industry-players-join-forces-to-accelerate - and is in a licence dispute with ARM so heavily incentivised to talk RISC-V up.
I'll believe the hype when I start actually seeing a bunch of shipping, commercial RISC-V products out there. Articles from 2017 and I still can't buy a phone with one in?
I have read about a couple of attempts to build a RISC-V phone using an ESP32, but no, as yet there's been no commercial offering with RISC-V as the main processor.
There are a number of RISC-V SBCs available, the most performant of which - the Lichee Pi 4A - ships with Debian installed. There's also the Roma laptop, which uses the same SoC, and a RISC-V tablet. So I think it's fair to say that RISC-V is on the cusp of consumer electronics.
I can see softer sales of mobes. Everybody has been pushed at 5G and, in the US, support was dropped for 3G which meant that even some 4G phones were deprecated as they used 3G for voice. There hasn't been a giant leap in smartphone utility for some time and buying yet another $1,000+ phone is getting old. The screens can't really get any bigger as people don't have a pocket that will hold a phablet. The folding screens are a nice try, but it's wishful thinking that those screens will last all that long with regular folding and un-folding. A small screen is one limit with input options another. People still have laptops and those that don't create anything can get by with tablets so there is less utility in a phone with faster and more powerful processors. Granted, there are some niche applications and users, but the broader market doesn't need that extra horsepower.
If ARM's focus is on processors for mobile applications, growth could be limited. They may need to look for applications beyond and come up with new products to fill those needs. Until then, we are just seeing big companies looking to make money by manipulating money. Another set of companies may be looking to preserve their supply chains by making sure they have a stake large enough to be secure, but that's just another sort of game.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
