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The strategy they are using to establish a revenue stream that justifies this valuation is to continue to raise prices on their customers. I think this works i

The strategy they are using to establish a revenue stream that justifies this valuation is to continue to raise prices on their customers. I think this works in the near term (next 5 to 10 years), and generate a ton of money for ARM, but it will drive additional momentum to RISC-V. The legendary Jim Keller is going all in on RISC-V, if you don't know Google him. His company has many core designs coming as well chiplets: https://tenstorrent.com/risc-v/ https://tenstorrent.com/risc-v/ Because of Jim Keller and similar efforts I wouldn't be surprised for RISC-V to see both core count as well as per core performance meet ARM over the next few years. Maybe even exceed if Jim can push the chiplet approach faster than ARM can roll theirs out. Hopefully this drives a lot of innovation and we all benefit as a result. I think that using ARM is going to be viewed as being locked into ARM's ever increasing licensing fees, where as if you go RISC-V, you are free to switch CPU providers.

devnullbrain 3y ago
Softbank has spent 7 years and a CEO finding out how difficult just raising prices is.
- boringg 3y ago
  Especially when your lifeline is tied to Apple. No way are they going to negotiate to raise prices in a meaningful way against their largest client. Actually> "Apple (AAPL.O) has signed a new deal with Arm for chip technology that "extends beyond 2040," according to Arm's initial public offering documents filed on Tuesday."
  - scrlk 3y ago
    Apple was one of the founding investors of ARM back in 1990 - it's likely they have an extremely generous licence and pricing terms as a result.
    - xadhominemx 3y ago
      Apple’s involvement with ARM’s founding has zero impact on their negotiations or pricing.
      - devnullbrain 3y ago
        It does when that involvement means they're one of the few architecture licensees. Allegedly.
        klelatti 3y ago
        They have an architectural license (for Arm v8/9) because they are a huge customer with deep pockets not because of a shareholding they sold a decade before that architecture was announced!
        monocasa 3y ago
        It's not the deep pockets per se, but the hand Apple had in designing AArch64. Apparently their relationship with ARM is more like the Intel/AMD relationship, ie. cross-licensing.
      - fomine3 3y ago
        SoftBank has/invests so many business related to Apple (like mobile career), that may affected to negotiation.
  - sapiogram 3y ago
    > No way are they going to negotiate to raise prices in a meaningful way against their largest client. Why not? It's not like Apple will have anywhere else to go for the next 8 years. x86 cores are too slow and power-hungry for the foreseeable future, and building their own risc-V core will take... at least 8 years.
    - wtallis 3y ago
      8 years sounds like an absurdly long time to retrofit a different instruction set onto an existing CPU core design.
  - londons_explore 3y ago
    The deal with apple is probably 0.1% of revenue from all hardware sales that contain ARM IP or something similar. Which means that if Apple decide to switch to RISC-V to save money, the deal is still in effect, but no money will be paid, so there might as well be no deal.
    - boringg 3y ago
      You think it's that low?
      - londons_explore 3y ago
        Yes. For ARM, having apple as a customer is a massive investor and customer confidence boost. For Apple, they won't offer much because they could develop their own CPU architecture ISA pretty easily (they control all code and compilers for the platform after all, and already employ lots of compiler and CPU developers).
packetlost 3y ago
> where as if you go RISC-V, you are free to switch CPU providers. Idk, this really isn't as true as you'd think. Yes RISC-V is an open and free ISA which will cut out some fees, but you'd still have to license IP/chip designs (if you can't make your own) and they could only undercut ARM by a little bit. Further, the lack of mobility across chips/boards/whatever is not usually from the ISA, but from the BSP, SDK, etc. so you still would have substantial lockin unless we somehow standardize on that (lol)
- aristus 3y ago
  You're not wrong, but having two choices of supply does wonders for squeezing profit margins from both back to the customer. Duopolies are terrible but better than monopolies.
- pclmulqdq 3y ago
  ARM actually has a pretty good story for how they can undercut RISC-V prices in that they can design the ISA rather than accepting the decisions of a committee. That committee used to make good choices, but things like the vector ISA seem more suspect.
  - packetlost 3y ago
    The general consensus I've heard is the vector extension is good? I do agree the design by committee is less than ideal, but the ability to add vendor extensions at all is nice for certain markets.
  - monocasa 3y ago
    The vector ISA seems alright to me. Particularly compared to Neon, but even compared to SVE.
- AnthonyMouse 3y ago
  Part of the issue here is that nobody is going to build something free on top of someone else's property. What good is a "free" design if you still have to pay ARM? Whereas once you have a free ISA which is actually in widespread use, you could get some designs out of universities or major corporations which intend to use them rather than sell them as their primary business and then release the design for the same reason they do for Linux code, potentially under a copyleft-style license. Those designs aren't going to be competitive with the state of the art, at least in the beginning, but they don't have to be. All they have to be is low power enough to stick in an embedded device and fast enough to run the display on a refrigerator and the lack of a license fee would cause them to replace a zillion ARM chips that currently go into every IoS device and <$200 phone and consumer internet router. That's a huge chunk of ARM's market. Then someone like Amazon evaluates this thing for something like the Kindle and finds that it's almost good enough, all they have to do is throw a couple of engineers at it for a short period of time, so they do and it gets released because what do they care of some non-competitor uses it in some cheap laptop. Commoditize your complement -- now laptops are cheaper and people buy more laptops on Amazon. Meanwhile the "small project" uncompetitive boards start to have their own open source BSP and SDK under the BSD license, which means anybody else can fork it for their own thing, and that's a competitive advantage so it happens a lot. But now it's way easier to reverse engineer the code because 95% of it is unmodified, so you start getting community replacements for that stuff and with any luck the OEMs stop even producing it and point you to the open source repository. It could be a long time before that takes over the high end, if that ever happens, but the low end? It's almost inevitable. And the high end is AMD64 and Apple, the latter of which has all the leverage in the world over ARM because they could always switch to RISC-V.
azinman2 3y ago
Building out tooling and even chips based on RISC-V is handing the future to China. They’re going all in because it’s an ISA that the west generated and builds support for but is free to use, which plays into their strengths of lowest cost and their ambition to own the future chips of the world.
- bhouston 3y ago
  You are right that China is going on in on RISC-V in part because of Western sanctions. It is yet another reason why RISC-V has so much momentum. It is in China's interest to destroy Intel's and ARM's competitive advantages and it is pouring money and people into it.
  - azinman2 3y ago
    They wouldn’t be producing ARM or x86 even if no sanctions. They want to own an entire ecosystem.
    - lmm 3y ago
      An architecture that's developed in public that anyone can implement is a funny way to achieve that. Particularly given that western firms do largely follow the IP rules, if China wanted an ecosystem they controlled, surely they'd develop their own proprietary one (or worst case, buy out one of the western also-rans).
      - azinman2 3y ago
        The point being that the west has already accepted it and is building tooling for it, yet it’s free. So they can’t be embargoed, but they can embrace, extend, and extinguish with massive subsidies and incentive.
RC_ITR 3y ago
I think everyone in this thread underestimates this part of ARM's business (from the F-1): * Expand our System IP and SoC Offerings. To enable further improvements in performance and efficiency, we continue to develop a broader set of configurable systems IP offerings, including proven on-chip interconnect, security IP, memory controllers, and other design IP to be used with our processors, including the integration of multiple IP technologies into a subsystem and additional information to assist in fabrication. More recently, we have invested in a holistic, solution-focused approach to design, expanding beyond individual design IP elements to providing a more complete system. By delivering SoC solutions optimized for specific use cases, we can ensure that the entire system works together seamlessly to provide maximum performance and efficiency. At the same time, by designing an increasingly greater portion of the overall chip design, we are further reducing incremental development investment and risk borne by our customers while also enabling us to capture more value per device.* ARM doesn't just give you the architecture, they give you a reference design that already works and then lets you customize it however you want. Companies like Apple don't care about that, but MediaTek, NXP, etc. use it to speed the design process meaningfully.
- monocasa 3y ago
  ARM already does that though. Their dev systems like the Juno boards are ARM designed chips with ARM IP through and through covering just about every accelerator and integration niche. CPUs, NoC fabrics, GPIO, sound, just about every hardware interface master and slave, AI inference, display scanout, etc. Integrators don't typically go all in on ARM IP though for a couple major reasons. 1) They want to provide some value add beyond the standard offerings or else why pick them over a competitor? 3) They have massive collections of IP blocks already that they don't have pay ARM for. Maybe it takes some engineering to convert to the next chip, but that's probably cheaper than what ARM is asking for.
  - RC_ITR 3y ago
    Sure, I'm not saying that ARM is in a good position per se, but that RISC-V has way more catching up to do than people realize.
miohtama 3y ago
Unity IPO’ed three years ago. Their stock is down 80%, common among tech stock since money printer stopped. However now their plan to turn the tech company to cash cow and milk existing customers seem to have backfired.
- bhouston 3y ago
  A lot of games can not just drop Unity quickly. So a bunch will be forced into paying Unity. Also remember Apple just made Unity "the way" for making full screen VR apps on their new VR device. Don't underestimate how much Unity can make this way... while a lot will drop Unity many games simply can not in the medium term.
  - miohtama 3y ago
    Exactly. Milk the cow until its dead and preferably little longer.
hunson_abadeer 3y ago
> if you go RISC-V, you are free to switch CPU providers. That's not even true within the ARM ecosystem itself. The chips from Infineon are not source-code compatible with STM, STM is not compatible with Microchip, Microchip is not compatible with TI... The problem is that the ARM core is just a portion of the architecture. Everything on top of that - GPIO, memory interfaces, timing, etc - is vendor specific, and will stay that way for RISC-V. RISC-V is just an instruction set architecture (with some appendages), not a blueprint for a complete CPU / MCU / SoC. Not to mention, the chips also won't be electrically-compatible. Your hardware architecture can be as daunting to redesign as the code, if not more so. There's a reason why we try to do as much as possible in software, after all...
- snvzz 3y ago
  >Everything on top of that - GPIO, memory interfaces, timing, etc - is vendor specific, and will stay that way for RISC-V. Not as true for RISC-V, as there's efforts (some of them complete) to standardize interfaces to standard peripherals. E.g. timers, gpios and watchdogs.
demondemidi 3y ago
An open source ISA isn't the same as a design. They are radically different, in order to use an ISA you need IP design. The companies that are gaining ground with RISC-V are all largely IP vendors, which is exactly what Arm is. It's just shifting where the dollars go.
apatheticonion 3y ago
I like the idea of an open platform centered around an open standard - I don't know enough about the subject but I wonder if RISC-V is viable as a complete product? Like, if we ignore the chip design aspects - is it guaranteed software compiled on one RISC-V chip will run on another RISC-V chip? (in the same way it does on ARM and amd64/x86? What about hardware interoperability? PCI? UEFI/Boot semantics? Power management? Who enforces that stuff for arm and x86 platforms?
- varjag 3y ago
  > What about hardware interoperability? PCI? UEFI/Boot semantics? Power management? Afraid I have bad news about ARM right there.
  - apatheticonion 3y ago
    I'm interested in understanding and keeping up with this space - do you have any suggestions for resources to look at?
- snvzz 3y ago
  > What about hardware interoperability? PCI? UEFI/Boot semantics? Power management? Refer to the RISC-V platform spec (ongoing). It depends on other specs, some of which (like those related to the boot process) have already been ratified.
  - apatheticonion 3y ago
    That's amazing - does that mean it's more complete than arm as a platform offering? I don't think arm has anything standard around the boot process and vendors have various implementations

devnullbrain 3y ago

Softbank has spent 7 years and a CEO finding out how difficult just raising prices is.

boringg 3y ago
Especially when your lifeline is tied to Apple. No way are they going to negotiate to raise prices in a meaningful way against their largest client. Actually> "Apple (AAPL.O) has signed a new deal with Arm for chip technology that "extends beyond 2040," according to Arm's initial public offering documents filed on Tuesday."
- scrlk 3y ago
  Apple was one of the founding investors of ARM back in 1990 - it's likely they have an extremely generous licence and pricing terms as a result.
  - xadhominemx 3y ago
    Apple’s involvement with ARM’s founding has zero impact on their negotiations or pricing.
    - devnullbrain 3y ago
      It does when that involvement means they're one of the few architecture licensees. Allegedly.
      - klelatti 3y ago
        They have an architectural license (for Arm v8/9) because they are a huge customer with deep pockets not because of a shareholding they sold a decade before that architecture was announced!
        monocasa 3y ago
        It's not the deep pockets per se, but the hand Apple had in designing AArch64. Apparently their relationship with ARM is more like the Intel/AMD relationship, ie. cross-licensing.
    - fomine3 3y ago
      SoftBank has/invests so many business related to Apple (like mobile career), that may affected to negotiation.
- sapiogram 3y ago
  > No way are they going to negotiate to raise prices in a meaningful way against their largest client. Why not? It's not like Apple will have anywhere else to go for the next 8 years. x86 cores are too slow and power-hungry for the foreseeable future, and building their own risc-V core will take... at least 8 years.
  - wtallis 3y ago
    8 years sounds like an absurdly long time to retrofit a different instruction set onto an existing CPU core design.
- londons_explore 3y ago
  The deal with apple is probably 0.1% of revenue from all hardware sales that contain ARM IP or something similar. Which means that if Apple decide to switch to RISC-V to save money, the deal is still in effect, but no money will be paid, so there might as well be no deal.
  - boringg 3y ago
    You think it's that low?
    - londons_explore 3y ago
      Yes. For ARM, having apple as a customer is a massive investor and customer confidence boost. For Apple, they won't offer much because they could develop their own CPU architecture ISA pretty easily (they control all code and compilers for the platform after all, and already employ lots of compiler and CPU developers).

packetlost 3y ago

> where as if you go RISC-V, you are free to switch CPU providers. Idk, this really isn't as true as you'd think. Yes RISC-V is an open and free ISA which will cut out some fees, but you'd still have to license IP/chip designs (if you can't make your own) and they could only undercut ARM by a little bit. Further, the lack of mobility across chips/boards/whatever is not usually from the ISA, but from the BSP, SDK, etc. so you still would have substantial lockin unless we somehow standardize on that (lol)

aristus 3y ago
You're not wrong, but having two choices of supply does wonders for squeezing profit margins from both back to the customer. Duopolies are terrible but better than monopolies.
pclmulqdq 3y ago
ARM actually has a pretty good story for how they can undercut RISC-V prices in that they can design the ISA rather than accepting the decisions of a committee. That committee used to make good choices, but things like the vector ISA seem more suspect.
- packetlost 3y ago
  The general consensus I've heard is the vector extension is good? I do agree the design by committee is less than ideal, but the ability to add vendor extensions at all is nice for certain markets.
- monocasa 3y ago
  The vector ISA seems alright to me. Particularly compared to Neon, but even compared to SVE.
AnthonyMouse 3y ago
Part of the issue here is that nobody is going to build something free on top of someone else's property. What good is a "free" design if you still have to pay ARM? Whereas once you have a free ISA which is actually in widespread use, you could get some designs out of universities or major corporations which intend to use them rather than sell them as their primary business and then release the design for the same reason they do for Linux code, potentially under a copyleft-style license. Those designs aren't going to be competitive with the state of the art, at least in the beginning, but they don't have to be. All they have to be is low power enough to stick in an embedded device and fast enough to run the display on a refrigerator and the lack of a license fee would cause them to replace a zillion ARM chips that currently go into every IoS device and <$200 phone and consumer internet router. That's a huge chunk of ARM's market. Then someone like Amazon evaluates this thing for something like the Kindle and finds that it's almost good enough, all they have to do is throw a couple of engineers at it for a short period of time, so they do and it gets released because what do they care of some non-competitor uses it in some cheap laptop. Commoditize your complement -- now laptops are cheaper and people buy more laptops on Amazon. Meanwhile the "small project" uncompetitive boards start to have their own open source BSP and SDK under the BSD license, which means anybody else can fork it for their own thing, and that's a competitive advantage so it happens a lot. But now it's way easier to reverse engineer the code because 95% of it is unmodified, so you start getting community replacements for that stuff and with any luck the OEMs stop even producing it and point you to the open source repository. It could be a long time before that takes over the high end, if that ever happens, but the low end? It's almost inevitable. And the high end is AMD64 and Apple, the latter of which has all the leverage in the world over ARM because they could always switch to RISC-V.

azinman2 3y ago

Building out tooling and even chips based on RISC-V is handing the future to China. They’re going all in because it’s an ISA that the west generated and builds support for but is free to use, which plays into their strengths of lowest cost and their ambition to own the future chips of the world.

bhouston 3y ago
You are right that China is going on in on RISC-V in part because of Western sanctions. It is yet another reason why RISC-V has so much momentum. It is in China's interest to destroy Intel's and ARM's competitive advantages and it is pouring money and people into it.
- azinman2 3y ago
  They wouldn’t be producing ARM or x86 even if no sanctions. They want to own an entire ecosystem.
  - lmm 3y ago
    An architecture that's developed in public that anyone can implement is a funny way to achieve that. Particularly given that western firms do largely follow the IP rules, if China wanted an ecosystem they controlled, surely they'd develop their own proprietary one (or worst case, buy out one of the western also-rans).
    - azinman2 3y ago
      The point being that the west has already accepted it and is building tooling for it, yet it’s free. So they can’t be embargoed, but they can embrace, extend, and extinguish with massive subsidies and incentive.

RC_ITR 3y ago

I think everyone in this thread underestimates this part of ARM's business (from the F-1): * Expand our System IP and SoC Offerings. To enable further improvements in performance and efficiency, we continue to develop a broader set of configurable systems IP offerings, including proven on-chip interconnect, security IP, memory controllers, and other design IP to be used with our processors, including the integration of multiple IP technologies into a subsystem and additional information to assist in fabrication. More recently, we have invested in a holistic, solution-focused approach to design, expanding beyond individual design IP elements to providing a more complete system. By delivering SoC solutions optimized for specific use cases, we can ensure that the entire system works together seamlessly to provide maximum performance and efficiency. At the same time, by designing an increasingly greater portion of the overall chip design, we are further reducing incremental development investment and risk borne by our customers while also enabling us to capture more value per device.* ARM doesn't just give you the architecture, they give you a reference design that already works and then lets you customize it however you want. Companies like Apple don't care about that, but MediaTek, NXP, etc. use it to speed the design process meaningfully.

monocasa 3y ago
ARM already does that though. Their dev systems like the Juno boards are ARM designed chips with ARM IP through and through covering just about every accelerator and integration niche. CPUs, NoC fabrics, GPIO, sound, just about every hardware interface master and slave, AI inference, display scanout, etc. Integrators don't typically go all in on ARM IP though for a couple major reasons. 1) They want to provide some value add beyond the standard offerings or else why pick them over a competitor? 3) They have massive collections of IP blocks already that they don't have pay ARM for. Maybe it takes some engineering to convert to the next chip, but that's probably cheaper than what ARM is asking for.
- RC_ITR 3y ago
  Sure, I'm not saying that ARM is in a good position per se, but that RISC-V has way more catching up to do than people realize.

miohtama 3y ago

Unity IPO’ed three years ago. Their stock is down 80%, common among tech stock since money printer stopped. However now their plan to turn the tech company to cash cow and milk existing customers seem to have backfired.

bhouston 3y ago
A lot of games can not just drop Unity quickly. So a bunch will be forced into paying Unity. Also remember Apple just made Unity "the way" for making full screen VR apps on their new VR device. Don't underestimate how much Unity can make this way... while a lot will drop Unity many games simply can not in the medium term.
- miohtama 3y ago
  Exactly. Milk the cow until its dead and preferably little longer.

hunson_abadeer 3y ago

> if you go RISC-V, you are free to switch CPU providers. That's not even true within the ARM ecosystem itself. The chips from Infineon are not source-code compatible with STM, STM is not compatible with Microchip, Microchip is not compatible with TI... The problem is that the ARM core is just a portion of the architecture. Everything on top of that - GPIO, memory interfaces, timing, etc - is vendor specific, and will stay that way for RISC-V. RISC-V is just an instruction set architecture (with some appendages), not a blueprint for a complete CPU / MCU / SoC. Not to mention, the chips also won't be electrically-compatible. Your hardware architecture can be as daunting to redesign as the code, if not more so. There's a reason why we try to do as much as possible in software, after all...

snvzz 3y ago
>Everything on top of that - GPIO, memory interfaces, timing, etc - is vendor specific, and will stay that way for RISC-V. Not as true for RISC-V, as there's efforts (some of them complete) to standardize interfaces to standard peripherals. E.g. timers, gpios and watchdogs.

demondemidi 3y ago

An open source ISA isn't the same as a design. They are radically different, in order to use an ISA you need IP design. The companies that are gaining ground with RISC-V are all largely IP vendors, which is exactly what Arm is. It's just shifting where the dollars go.

apatheticonion 3y ago

I like the idea of an open platform centered around an open standard - I don't know enough about the subject but I wonder if RISC-V is viable as a complete product? Like, if we ignore the chip design aspects - is it guaranteed software compiled on one RISC-V chip will run on another RISC-V chip? (in the same way it does on ARM and amd64/x86? What about hardware interoperability? PCI? UEFI/Boot semantics? Power management? Who enforces that stuff for arm and x86 platforms?

varjag 3y ago
> What about hardware interoperability? PCI? UEFI/Boot semantics? Power management? Afraid I have bad news about ARM right there.
- apatheticonion 3y ago
  I'm interested in understanding and keeping up with this space - do you have any suggestions for resources to look at?
snvzz 3y ago
> What about hardware interoperability? PCI? UEFI/Boot semantics? Power management? Refer to the RISC-V platform spec (ongoing). It depends on other specs, some of which (like those related to the boot process) have already been ratified.
- apatheticonion 3y ago
  That's amazing - does that mean it's more complete than arm as a platform offering? I don't think arm has anything standard around the boot process and vendors have various implementations