Arm CEO 'excited' about its future as an independent company

AppleInsider

Nvidia backed off the purchase of Arm after facing a difficult regulatory environment, but the new Arm CEO claims that having to go it alone won't hamper plans for the future.

New Arm CEO looks forward to a future as an independent company

The current owner of Arm, Softbank, will take Arm public to unload the company later in 2022. Even though Nvidia failed to complete the $66 billion purchase, it will remain a key customer for the company.

In an interview with BBC News, new CEO Rene Haas spoke about Arm's return to independence and how that will shape the road ahead. He is very excited for the future and says there isn't an end market for Arm.

"We are very excited about the future for Arm as an independent company again," said Haas. "There isn't anything Nvidia and Arm could do together that we can't do by ourselves."

He blamed the failed Nvidia acquisition on a challenging regulatory environment. Despite that, Nvidia will remain a customer with its continued 20-year license agreement with Arm.

Now, Haas is looking ahead to other markets that will see high demand for semiconductors. The two he points to are cloud computing and automotive.

"Those two markets are seeing a huge amount of growth and really have the same characteristics to that of the smartphone," Haas said. "They both need more and more compute performance but also more and more efficiency - whether it is a data center where limited power can come in or an electric vehicle that runs on a battery."

Nvidia not purchasing Arm may be a boon for the industry, however, since Arm licenses much of its intellectual property and patents to other companies. For example, Apple uses Arm technology in its custom Apple Silicon processors like the M1.

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rob53

Last sentence. You say Apple uses Arm technology right after saying it licenses intellectual property. I see technology as an actual, physical product not just the instruction set. Does Apple actually use physical components manufactured by Arm?

22july2013

A company that "goes public" is not really "independent." It still has bosses, which are the board of directors. And it has many accountability rules because it's publicly traded. A truly "independent" company would have to be one that's privately owned.

The largest privately owned company in the US is Cargill. About 90% of Cargill is owned by the descendants of the Cargill family founders. They make about $3B/year profit on revenue of about $110B/year.

The main advantage of a privately held company is that (at least in the USA) they don't have to release annual reports, which their competitors can read and use to compete with them. Another advantage to being privately held is that the company can switch strategies very quickly for long term purposes without worrying about regulations for providing quarterly earnings. Privacy means keeping secrets about sources of profit from the competition.

Over 99% of all companies in the US are privately held (and the percentage is rising because the number of companies on US stock exchanges has dropped by 75% in 20 years.) Of course, private companies tend to be smaller, and more secretive, but from what I can determine, altogether they make up a similar amount of profit as the sum total of all public corporations. So they are as important to the economy as pubic companies.

lkrupp

rob53 said:

Last sentence. You say Apple uses Arm technology right after saying it licenses intellectual property. I see technology as an actual, physical product not just the instruction set. Does Apple actually use physical components manufactured by Arm?

ARM does not manufacture any components.

How does Arm, a chip company, conduct business without making chips?

Arm Holdings, Ltd. does not manufacture its own chips. It has no fabrication facilities of its own. Instead, it licenses these rights to other companies, which Arm Holdings calls "partners." They utilize Arm's architectural model as a kind of template, building systems that use Arm cores as their central processors.

https://www.zdnet.com/article/arm-processors-everything-you-need-to-know-now/

Apple is a co-founder of ARM Holdings and has licenses to both ARM’s instruction sets and chip design. People who didn’t know what they were talking about thought that if Nvidia bought ARM they could shut down Apple’s ability to use ARM tech. Nonsense. 

https://en.wikipedia.org/wiki/Arm_Ltd.

The company was founded in November 1990 as Advanced RISC Machines Ltd and structured as a joint venture between Acorn Computers, Apple, and VLSI Technology. Acorn provided 12 employees, VLSI provided tools, Apple provided $3 million investment.

dewme

rob53 said:

Last sentence. You say Apple uses Arm technology right after saying it licenses intellectual property. I see technology as an actual, physical product not just the instruction set. Does Apple actually use physical components manufactured by Arm?

The hardware "designs" are likely implemented in a behavioral language like VHDL or Verilog, which is tangible, physical, and deliverable asset, much like source code. It's not just a bunch of schematics, architectural diagrams, and APIs. I've heard that ARM uses Verilog, but I can't confirm. Apple's engineers very likely design their SoCs by fully fleshing out their designs using the same hardware design language that ARM uses to verify that the entire design, ARM plus Apple, forms a fully integrated and coherent design before they can commit anything to fabrication. In essence the functional behavior of the hardware is fully expressed in an executable software format long before anything is committed to silicon. Thus, the design technology delivered by ARM is very much a physical product.

This article is a very high level description of a simple chip design https://www.raspberrypi.com/news/the-journey-to-raspberry-silicon/ . I would assume the Apple Silicon team deals with designs that are several orders of magnitude more complex.

Xed

I'm glad to see this as the outcome. I believe this will not only help ARM's future, but also the future of computing as a whole.

highframerate

Nvidia not purchasing Arm may be a boon for the industry, however, since Arm licenses much of its intellectual property and patents to other companies. For example, Apple uses Arm technology in its custom Apple Silicon processors like the M1.

Intel is spreading $1 billion in cash around to RISC-V manufacturers. In pure performance, a SiFive quad core 32 bit RISC-V CPU rivals the quad core ARM-53 SOCs that are used in pretty much every smart TV device (Apple TV aside of course). Within 5 years, RISC-V could deprive ARM Holdings of a ton of licensing revenue. 

https://arstechnica.com/tech-policy/2022/02/intels-strategy-for-outflanking-arm-takes-shape-with-bet-on-risc-v ;

Of course, not everyone wants to make their own SOC. But there will be a lot of interest in switching from ARM SOCs to RISC-V SOCs because no longer having to pay the license fees will make them cheaper. 

davgreg

It would seem that it is in everyone’s interest for ARM to remain independent. Maybe a consortium of large tech companies could each buy 10% of ARM in order to hold the majority of shares.

virgilisleading42

Xed said:

I'm glad to see this as the outcome. I believe this will not only help ARM's future, but also the future of computing as a whole.

I actually think this is going to be really hard for ARM. Probably a great thing for Nvidia though but hard for ARM. They are not a very profitable company and need a bigger company to own them and put up with the lack of profitability for the prestigae of it. Their business model requires a lot of money on R&D. Last year they made only 274 million dollars of Net income. Intel, AMD, and Nvidia make almost 65% margin on their businesses and large profits. Intel for example made 19 billion dollars in Net Income last year even though ARM was in far more machines. I'm not sure the stock market is going to look to favorable on a company that's been around for over 30 years and barely making any profit at all.  

highframerate

davgreg said:

It would seem that it is in everyone’s interest for ARM to remain independent. Maybe a consortium of large tech companies could each buy 10% of ARM in order to hold the majority of shares.

Nope. Without Nvidia's money and engineers, ARM Holdings was never going to make CPU and GPU cores capable of challenging those by Apple, AMD, Intel and Nvidia (GPU only). The people who keep claiming that Apple Silicon means Intel's days are numbered keep ignoring that Apple Silicon only goes into Macs, which have 8% market share. Using CPUs made from ARM Holdings cores only makes sense for devices under $400, and even there if your use case is a fanless 2-in-1 with long battery life for media consumption and light productivity. For literally everything else, you are better off with with x86 (especially if it is AMD). 

And no, there isn't anyone else with an incentive to invest the tens of billions that it would take to improve ARM Holdings' IP either. Why? Because this is what would happen. Samsung - for example - invests $50 billion to help ARM Holdings' make an M1 competitor. ARM Holdings turns around and licenses the Cortex-M to Samsung ... and everybody else. Most OEMs are still going to buy their CPUs from Qualcomm and MediaTek as before for the same reasons as before, meaning that Samsung will have wasted $50 billion. Sure, having Galaxy S and Galaxy Tabs capable of competing with iPhones and iPads in performance would mean Samsung selling a few more of them, but nowhere near enough to make the $50 billion back. Sure, they could start selling CPUs for PCs and servers ... but so could everyone else.

So it is a lot smarter to instead invest $5 billion in folding phones, leading the Android industry in software updates and other moves that gives their products a differentiating advantage. That's why this "consortium where 10 companies buy 10% of ARM Holdings' stock" isn't going to work. What do Qualcomm, Samsung, MediaTek and 7 other suckers get for paying $6 billion in ARM Holdings stock on top of still having to license their IP at the same rates as everybody else? 

This deal is a victory for the status quo. It stinks for everybody else. 

michelb76

Wow, so they did a full 360 about the IPO? A month ago they said it would be the worst thing to happen because of possible shareholder pressure.

GeorgeBMac

AppleInsider said:

...
In an interview with BBC News, new CEO Rene Haas spoke about Arm's return to independence and how that will shape the road ahead. He is very excited for the future and says there isn't an end market for Arm.

"We are very excited about the future for Arm as an independent company again,"

...

Read on AppleInsider

Unless the U.S. invokes its "National Security" bullshit again and restricts who they are allowed to do business with.

nadriel

michelb76 said:

Wow, so they did a full 360 about the IPO? A month ago they said it would be the worst thing to happen because of possible shareholder pressure.

180. 360 is a full turn.

It remains to be seen how the company will be valued. The 66 billion dollars NVIDIA was willing to pay seems a bit excessive for the revenue and profits ARM generates, for the stock value I mean. 

GeorgeBMac

nadriel said:

michelb76 said:

Wow, so they did a full 360 about the IPO? A month ago they said it would be the worst thing to happen because of possible shareholder pressure.

180. 360 is a full turn.

It remains to be seen how the company will be valued. The 66 billion dollars NVIDIA was willing to pay seems a bit excessive for the revenue and profits ARM generates, for the stock value I mean. 

I suspect NVIDIA planned on leveraging the technology -- which is why they would pay highly for it and why others were worried about them owning it.