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Report: ARM is for sale and Nvidia’s interested, Apple isn’t
- starfallg 6y agoThe 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.
- humps 6y agoNvidia acquiring ARM wouldn't pose much of a problem because they can just point to AMD, which already offers CPU and GPU, so it would put the two companies on a more even footing in that regard.
- AWildC182 6y agoThat only really holds water at a cursory glance though... Nvidia owns ALL of video and then some, AMD only owns a (growing) tiny fraction of CPU and happens to have a couple cards. It's not just about markets but market share.
- humps 6y agoAMD holds roughly 30 percent share of the CPU* and graphics card/GPU markets, that's far from insignificant and certainly not a "tiny fraction" or a "couple cards." * https://www.forbes.com/sites/greatspeculations/2019/09/24/amd-vs-intel-a-detailed-comparison-of-revenue-and-key-operating-metrics/#4ffc4d074af4 https://www.forbes.com/sites/greatspeculations/2019/09/24/am... https://wccftech.com/amd-radeon-and-nvidia-geforce-discrete-gpu-market-share-q4-2019/ https://wccftech.com/amd-radeon-and-nvidia-geforce-discrete-...
- saxonww 6y agoI think they also totally own the console space, don't they? The next-gen consoles from both Sony and Microsoft are based on custom AMD cpu/gpu combos.
- humps 6y agoyes, I'd forgot about that. Current gen and next gen are both AMD silicon.
- javagram 6y agoNintendo switch uses NVIDIA, but yes AMD is the provider for Microsoft and Sony.
- stefan_ 6y agoThe lowest bidder owns the console space. It's not a good business, it's a bit of cash flow.
- dralley 6y agoDisclaimer that I really know nothing about these kinds of deals. I understand that has historically been the case, but AMD is in a pretty good negotiating position right now, being effectively the only company that can provide what they bring to the table. * a SoC with integrated CPU and GPU * with high performance and decent power consumption * and great synergy with the desktop x86 platform, in terms of developer knowledge, available tooling, and ISA compatibility with older games I wouldn't be surprised if AMD is making a decent respectable margin this time around. And if not, what they most certainly did get, was a bunch of free R&D money for developing ray-tracing technology for the consoles, which they can now leverage through their entire portfolio.
- Qwertious 6y agoThe real benefit of owning the console space isn't money, it's forcing all the console developers to develop specifically for your hardware. If you want to eke out all the performance on Xbone or PS4, you must take full advantage of AMD's CPU/GPU architecture.
- 6y ago
- znpy 6y agointel also sells cpu and gpu, technically.
- ahartmetz 6y agoSoon not so technically anymore, if Intel's Xe project works out. Midrange GPU prices have been rising and rising in the last ten years, so competition is welcome. https://www.tomshardware.com/news/intel-xe-graphics-all-we-know https://www.tomshardware.com/news/intel-xe-graphics-all-we-k...
- sitkack 6y agoThere has been no meaningful antitrust action in over a decade. I wouldn't bank on it.
- deleted 6y ago[deleted]
- ben_w 6y agoA little over a decade ago, a lot of stuff went wrong because a bunch of economically dominant corporations figured they were too big for governments to allow them to fail. And it looks like big tech is developing much the same rich-and-out-of-touch reputation that bankers and stock traders used to have. I don’t know who, but I am assuming one of the FAANGs will be forcibly broken up in the next decade.
- setpatchaddress 6y agoHow'd that work out for the bankers and stock traders?
- rurp 6y agoIt worked out pretty great for them, everyone else though... not so much. The bankers got to enjoy inflated profits and bonuses for years knowing that the government would step in when things eventually blew up. Privatizing the gains and socializing the losses is a playbook the tech giants are all too happy to keep pushing as long as the government allows them to.
- adventured 6y agoThe parent is referring to the blocking of an acquisition. There have been many examples of that type of action on the basis of competition concerns. The Justice Dept and FTC routinely try to block acquisitions where there are competition concerns. They don't always win, as in the case of AT&T / Time Warner (or in the case of AT&T / T-Mobile, they did successfully prevent that). Some other examples: Anthem & Cigna, Sabre & Farelogix, Edgewell & Harry's, Office Depot & Staples, Sysco & US Foods.
- snapetom 6y agoYep. They call it out. "ARM is so widespread that buying it will be a regulatory nightmare, and even the most lenient rubber-stamp regulators around the world must shudder at the idea of an existing ARM licensee buying ARM. " Practically all of Apple's product line will be powered by ARM in the near future. Buying ARM would put them at a huge advantage while heavily influencing the chip IP of competitors. I can't imagine regulators in the US and EU not raising an eyebrow at this.
- Despegar 6y agoThe most likely outcome for ARM is that it goes public again rather than being bought out.
- 2bitencryption 6y agocan someone explain how ARM as a business works? 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?) 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? What's the business model? Do they get paid per ARM chip sold, or yearly for the rights to sell ARM chips, etc?
- deepnotderp 6y agoSome companies (eg Apple) have an ARM architectural license, which gives them the ability to design custom microarchitectures, but using the same ARM ISA.
- Kipters 6y agoI don't know exactly how compensation works, but they have basically two products: - The ARM ISA (the "specification") - A series of chip designs implementing such ISA (the Cortex series) Customers can either license the Cortex design to implement in their own silicon or license the ISA and design their own CPU (like Apple did). There isn't one single Cortex core, but many of them at different performance/price points
- derefr 6y agoWhy exactly does one need to license an ISA? AMD doesn't license x86 from Intel, AFAIK. What's the IP that Apple would otherwise be infringing upon if they didn't license? The "ARM" trademark?
- daxelrod 6y agoAMD created x86_64 and holds patents on it. They and Intel have a cross-licensing agreement for various patents covering x86 and x86_64. https://en.wikipedia.org/wiki/X86-64#Licensing https://en.wikipedia.org/wiki/X86-64#Licensing
- bryanlarsen 6y ago
- AWildC182 6y agoI 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. 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...
- sitkack 6y agoI am a huge RISC-V fan, like Cathy Bates level, but there is so much that ARM can do over the next 5,10,15 years but it looks like they are incapable of the required transformations. Everything that is good about RISC-V is already at ARM's disposal. Currently it looks like SiFive was borne out of a solution for the organizational issues that plague innovator's dilemma companies. I am envious of SiFive's position right now. I hope they don't get swallowed by a dinosaur. The only reason NVidia wants ARM is because they can't have an x86 license. Apple doesn't care because they probably have an escape/hedge clause on their ARM license and they will soon be shipping an IR. They have ISA hopped so many times it is old hat to them.
- dividedbyzero 6y agoWhat is an IR?
- moreati 6y agohttps://en.wikipedia.org/wiki/Intermediate_representation https://en.wikipedia.org/wiki/Intermediate_representation
- mtgx 6y agoSure, but whether Arm remains with a cash-starved Softbank or is sold for tens of billions of dollars to a company like Nvidia, it seems inevitable that royalties for their licenses will drastically increase in the near-to-medium future. And this will inevitably open the market for RISC-V chips. I mean, this is already the case, when Arm licenses are still very reasonable, just on a much slower trend/adoption rate. Once license costs rise to 4x or more, I expect RISC-V adoption rate to grow by at least as much, too. https://www.reuters.com/article/us-softbank-group-arm-exclusive/exclusive-arm-raises-prices-on-chip-technology-for-some-customers-sources-say-idUSKCN24G1RM https://www.reuters.com/article/us-softbank-group-arm-exclus...
- chvid 6y agoHow 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?
- chvid 6y agoOr let me ask in different way: why use ARM if you control and build the whole stack from electronics to operating system to the software running on it? The core instruction set is from the 80es. Surely you can come up with some better today were you to design it from scratch?
- Alupis 6y ago> Surely you can come up with some better today were you to design it from scratch? Ya, but then you have to develop and support the entire ecosystem around just the instruction set. That means compilers, languages, runtimes, and more - which is not a trivial undertaking. Perhaps Apple could pull it off, but it would take a very long time to get something entirely new stable enough, and performant enough, to compete with anything being offered today. Plus, it's not Apple's focus and doesn't really benefit them much either. Nobody builds iOS apps in assembler - but they expect it to run fast. That takes a very well tuned compiler, and a very well refined CPU architecture.
- mjw1007 6y agoThe 64-bit ARM ISA was basically redone from scratch, around 2010. It isn't "mostly the same instructions but with 64-bit registers" the way 64-bit x86 is.
- earthscienceman 6y agoDo you (or anyone else) know where I can read about that?
- mjw1007 6y ago
- wronglebowski 6y agoIs regulation really that big of an issue? 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?
- ChrisSD 6y agoIt's not certain but it is a big risk. Nobody wants to be spending time and money on doing a deal when there's a high risk it'll be blocked at the final hurdle.
- smabie 6y agoT-mobile and Sprint were allowed to merge because they were both uncompetitive as stand-alone companies: their merger deconsolidated the wireless space, not the other way around.
- tmaly 6y agoIf ARM is so important, surely the government would give consideration to have an American company own it. I am surprised that Intel in not in talks as a bidder.
- ID1452319 6y agoARM is British before it was bought by SoftBank
- Alupis 6y ago> I am surprised that Intel in not in talks as a bidder I'm surprised too, but can't help thinking Intel would be the worst possible steward of the ARM ecosystem. Back to the same-old anti-competitive Intel practices of the 2000's... For what it's worth, I kind of have the same feeling about Nvidia too. I think the best stewards of ARM IP would be an organization that is fully invested in seeing ARM dominate... not an organization that's just looking to add ARM patents to it's warchest.
- klelatti 6y agoNot 100% sure which government you're referring to here but a polite reminder that ARM, although owned by Softbank, is still a British company with its HQ in Cambridge UK and design centres around the world including the US. I'm sure many US companies would be fine owners of ARM but it doesn't have to be owned by one to secure its future and that of the architecture. Intel would a) not be allowed to buy for very clear antitrust reasons b) as owner would be very likely to be a disaster for both Intel and ARM. Intel has had ARM licenses in the past and has sold the relevant businesses.
- manuelabeledo 6y agoIntel has quite a record on screwing up anything ARM related. They bought StrongARM from Digital, then tried manufacturing their own ARM based chips (XScale) for around five years, to finally sell the whole business to Marvell. On top of that, their mobile business lines are and have always been weak.
- aleppe7766 6y agoA 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.
- jki275 6y agoI don't know the details of Apple's licensing agreements, but note the fact that the word "ARM" is totally absent from all their marketing. They own their own chip design company (PA Semi), we know they're using the ARM ISA, but I suspect they don't need anything from ARM the company anymore.
- jupp0r 6y agoJust 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.
- lliamander 6y agoTrue, but x86 also got it's start in (relatively) low-end systems (PCs) and eventually overtook high-end CPUs from the bottom. ARM looks to be in a position to do that.
- znpy 6y agoone might argue that a long time has passed and the world, the industry and the market are all very different, though.
- lliamander 6y agoThat's not a specific enough claim for me to either agree or disagree with.
- cpeterso 6y agoIntel is already losing desktop market to ARM with Apple's Mac transition from Intel to "Apple Silicon" (ARM). Cheap RISC-V CPUs seem to have a much brighter future than ARM for consumer appliances like washing machines than have slim profit margins and don't need compatibility with other devices.
- lliamander 6y ago> Cheap RISC-V CPUs seem to have a much brighter future than ARM for consumer appliances like washing machines than have slim profit margins and don't need compatibility with other devices. Do you think ARM will fortify it's position in the smartphone/pc/server space and surrender it's traditional stronghold of embedded to RISC-V?
- solarkraft 6y agoHow can anyone not be interested in owning ARM? 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 long term, but it's a good decade out). 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?
- numbsafari 6y agoOne word: antitrust.
- anoncareer0212 6y agoyour 2nd sentence is a zen answer to the first sentence reminds me the old Eric Schmidt quote about how YouTube was cheap because it was expensive - had a ton of legal liability and a ton of engineering work required to meet the needs of rights owners
- jpalomaki 6y ago$32 billion price tag might be a turn-off for many. Getting a new home from non-neutral buyer might cause licensees to start looking for alternatives.
- imtringued 6y agoThere is no value in owning ARM for its licensees other than engaging in non competitive practices against its other licensees. That means you need to have 32 billion dollars to burn with the expectation of never getting them back in a way that can be attributed to the ARM acquisition. The potential gain is pretty slim because the only way a licensee can extract value from the purchase is by destroying ARM which negates the entire purpose of an acquisition.
- deleted 6y ago[deleted]
- ETHisso2017 6y agoWhy doesn't TSMC buy ARM?
- deleted 6y ago[deleted]
- sys_64738 6y agoARM Holdings is the IP licenses it sells is it not? I don't think ARM Holdings does HW design, or do they?
- simonebrunozzi 6y agoI would never want to buy ARM if I were Apple. Here's why. 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. The article says it well: > Arm’s licensing operation would fit poorly with Apple’s hardware-focused business model. > There may also be regulatory concerns about Apple owning a key licensee that supplies so many rivals. 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. Edit: two very relevant comments in the parent thread, I'll just mention them here for completeness: > the revenue of ARM before Softbank acquisition was less than the Net profits of Intel. (from https://news.ycombinator.com/item?id=23930895 https://news.ycombinator.com/item?id=23930895) True. As mentioned above, architecture success != economic success > Risc-V (from https://news.ycombinator.com/item?id=23930814 https://news.ycombinator.com/item?id=23930814) Absolutely relevant. I am bullish on Risc-V and think there's a good chance we will all eventually converge to that.
- toyg 6y agoTrue, but losing influence on the core component you've pivoted your whole company around, would also be pretty disastrous. Or in memespeak: scenes when nVidia controls Apple's CPU roadmap.
- blinkingled 6y agoNothing stops Apple from giving no craps about ARM CPU roadmaps though. They could just license what they need and build a completely custom everything on top without needing it to be a standard implementation in anyway. So long as whoever is buying ARM is legally mandated to provide licenses - Apple doesn't have to rely on them actually pushing out new CPUs/modules/features. Historically I think they have just licensed the ISA and built their own thing on top. Maybe they needed the Big.Little stuff in the past but for the future they seem to be confident enough not to need anything from ARM or do it themselves.
- 6y ago
- WhatTheFrick 6y agoWhat do you guys think could be the implications for employees who may or may not be finding out about this sale through HN rather than internally?
- Zenst 6y agoApple 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. But many reasons Apple buying ARM is not a good fit for Apple. 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? 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.
- laurencerowe 6y ago> 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. ARM is definitely mature, it originally IPO'd in 1998 and remained public until it was bought by SoftBank in 2016.
- evilelectron 6y agoWhy is Microsoft not interested? Or they are and it has not been reported? 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.
- klelatti 6y agoI suspect there is a bit of a Catch-22 with any sale. 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? 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. 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.
- protomyth 6y agoI'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.
- H8crilA 6y agoNvidia's stock is in a massive bubble, so an all-stock transaction is a no brainer here. They will be getting ARM for free.
- starfallg 6y agoSoftbank and Vision Fund aren't exactly looking for Nvidia shares though. They are looking for cold hard cash to plug the massive hole in the failing investments.
- BbzzbB 6y agoI think Son is looking for the next big thing, probably something about shared workspaces.
- imtringued 6y agoDidn't they already have such a business? Wasn't it called WorkForMe (Me = Adam Neumann)?
- BbzzbB 6y agoIt is the debacle I was referring to.
- basch 6y agoI've been thinking about this "stock is a bubble" with regard to Nvidia and Tesla. Normal investing logic says to pay attention to P/E. However, if you look at stock as its own currency, basically dollars*managementskill, putting a dollar into Nvidia or Tesla basically means "if I give this money to someone else, they can do better with it than if I hold onto it. It would also be a way of "investing" in a management team, helping support them financially so they can go out and make acquisitions. Then Nvidia and Teslas stock price becomes less "a bajillion times their next five years of earnings" and more "what could these great teams buy or build if we pump them full of cash." Youre investing more than just the future of the current company, as it exists right now. I don't see Softbank wanting Nvidia stock though, unless they intend to liquidate it quickly.
- ChuckMcM 6y agoInteresting article. I wonder what is really happening. Looking at moves by Chinese vendors and others, I'm going to hypothesize that ARM said to itself: "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." 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. 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. 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.
- naves 6y agoWhat if it gets acquired by a Chinese fund/conglomerate?
- trasz 6y agoWhich might have been the best possible outcome from the global point of view.
- throwmemoney 6y agoThe 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. No wonder everyone is jumping the ship over to RISCV. Soft Bank did not do its due diligence, did anyone at SoftBank hear of RISCV before buying ARM in 2016? The writing was on the wall since RISCV ISA was made open source.
- slim 6y agoI wouldn't invest in ARM if they can't sell to Chinese companies
- greatjack613 6y agoWhy not?
- slim 6y agoit seriously limits it's growth
- commandlinefan 6y agoI never was able to figure out why ARM was so much more popular than MIPS. ARM always felt unnatural to me.
- smallnamespace 6y agoGiven 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? 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.
- dangjc 6y agoARM 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.
- gsnedders 6y agoARM IPO'd in 1998; they were publicly held till acquired by SoftBank in 2016.
- baybal2 6y agoIf I were AMD, I would've done just anything to prevent ARM going to a single vendor in their ecosystem, Nvidia particularly.
- dwild 6y agoI 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.
- fischert 6y agoThe situation seems pretty fucked-up with China CEO Allen WU refusing to leave after being fired. https://www.electronicsweekly.com/news/business/arm-china-asks-beijing-government-intervene-row-arm-uk-2020-07/ https://www.electronicsweekly.com/news/business/arm-china-as...