Arm CEO 'excited' about its future as an independent company
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.
Read on AppleInsider
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.
Read on AppleInsider
Comments
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.
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.
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.
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.
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.