
Intel Licenses ARM Technology to Boost Foundry Business - shawkinaw
http://www.bloomberg.com/news/articles/2016-08-16/intel-licenses-arm-technology-in-move-to-boost-foundry-business
======
dbcurtis
Andy Grove famously said: "We have a simple strategy. We build fabs, and then
we fill them."

That is not just a glib remark. Intel builds leading edge fabs, and runs them
very well. Then it simply looks at every design it could run, and ranks them
by gross margin per wafer. When the fab is full, low margin projects either
run on non-Intel fabs or alternatively the teams get redeployed.

And the kind of fab capacity Intel has is a strategic weapon. If Intel decides
your corner of the market is going to be paved with silicon, prepare to get
paved over.

My take on Intel licensing ARM is two-fold: 1) They have decided the gross
margin per wafer of running some ARMs is looking pretty good, and 2) they
perceive a benefit of using Intel's fab technology as a strategic weapon to
own as much of the ARM market as they want.

~~~
Aissen
Excellent remark. I'm wondering how they'd do that though. A quick search
tells us a standard Intel CPU is in the 200-300mm² range. A server one might
go to the 400-600mm² range.

A high-end (higher margin) ARM SoC like the A9x is in the 150-200mm² range.
I'm guessing it's the same for qcomm/samsung/lg's offering. How would it be
more profitable to go from a $30-$50 SoC to an $300-$900 one ? Even when
accounting for processor node differences (negligible between Samsung and
Intel at 14nm or TSMC at 16nm), I can't see an ARM chip bringing high-enough
margin.

Unless they envision some magical tiny IoT chip that would be expensive ? Or
that smartphone SoCs price will continue to go higher? What am I missing ? Are
they preparing for the end of the x86 PC/Server market (hence the need to fill
the fabs) ?

~~~
ghshephard
I think you're touching on something important - the refresh cycle for
PCs/Laptops is going to very soon be transitioning from the traditional 2-year
cycle to 3-years, and, in the case of desktops, we're going to be seeing
people run their systems for 4, even 5 years before considering upgrading.
Combine this trend (which I think we can all agree on), with the fact that for
a lot of people, their dominant computer _is_ their smart phone/phablet, which
is being refreshed every two-years, and you can see that fairly soon (if not
already) Intel Fabs that focus on making chips for the desktop/laptop market
will be underutilized - and there is a _lot_ of capital tied up in those.

~~~
syshum
>the refresh cycle for PCs/Laptops is going to very soon be transitioning from
the traditional 2-year cycle to 3-years, and, in the case of desktops, we're
going to be seeing people run their systems for 4, even 5 years before
considering upgrading.

We have been on a 3/5 cycle for the last 10 or so years. (3 year laptop/5year
desktop)

We are likely moving to a 5/8 cycle with our current hardware.

> their dominant computer is their smart phone/phablet, which is being
> refreshed every two-years,

I am seeing less and less people willing to replace their phones on the 18-24
month cycle. The primary reason this occurred originally was cell phone
carriers used the "upgrade" to lock people in to an additional 24mo contract.
As we see less and less contracts and more people paying for their phones out
of pocket or in installments, the replacement window is increasing, I expect
by the end of 2017 to see the replacement be 36-48 mos for Cell Phones. This
is especially true for any phone priced over ~$350.

Most of this comes down to how long the OEM will continue to issue OS Updates
for the hardware, if your phone is getting updates to the OS 36mos after you
bought it there is likely very little reason to spend another $400 on a phone.
We will likely see some Manufacturers/Carries taking the opportunity to screw
over their customers by refusing updates after 24 months in order to extort
them into a replacement. Hopefully the market responds to these companies by
pushing them to bankruptcy but...

~~~
ghshephard
A lot also has to do with the Hardware Support as well. I know our company
just buys Applecare for the Laptop, and if something goes wrong with it,
employee just brings it in to the Apple Store and gets it fixed, so 3 years is
pretty much the outside limit. If your company has internal support
mechanisms, they might be able to stretch it out further.

Personally, I consider myself showing self restraint if I don't upgrade my
phone on an annual basis, and don't think I've ever gone more than 2 years -
but I realize I probably fall into a niche.

~~~
syshum
>>If your company has internal support mechanisms, they might be able to
stretch it out further.

We do, I have probably ~2,000 systems under management, not a single one of
the Apple.

We always buy the 3 year extended warranty from the manufactures, and most of
the Major Vendors will also sell a 3 year extended hardware support after the
extended warrany, giving us 6 years of full hardware support on the systems,
after 6 years most of them have been full deprecated by accounting anyway so
for year 7 and 8 (desktops only, laptops would have been replaced at that
point) we likely just keep a few spares and replace as they fail.

~~~
ghshephard
Did you mean to say that none of the 2000 systems you have under management is
an Apple System? That would be very unusual for a technology company, where
being able to use Apple gear to get work done is a pre-requisite for a lot of
engineers considering applying for a job.

The nice thing about Applecare, is pretty much any major city in the world
there is an Apple authorized reseller that I can bring the gear in to be
replaced. Downside, is there isn't the same type of "Onsite, 4 hour repair
service" that companies like Dell offer.

I've got a laptop (2013 Macbook Air) that's up for renewal, but, honestly,
it's fast enough that I don't really feel the desire to get a new one until
Apple comes out with their new MacBook Pros. For the first time in a long
time, I don't feel any urgency to upgrade...

~~~
syshum
>>Did you mean to say that none of the 2000 systems you have under management
is an Apple System?

Yes

>>That would be very unusual for a technology company, where being able to use
Apple gear to get work done is a pre-requisite for a lot of engineers
considering applying for a job.

Where did I say I work for a technology company? We do have alot of Engineers
however, Mechanical and Electrical. None of them use Apple.

Further I assume by "engineer" you mean software developers, I know a TON of
devs that will not touch apple with a 10 foot pole. They us Linux or nothing.

Of course I also avoid silicon valley like the black death so....

>Downside, is there isn't the same type of "Onsite, 4 hour repair service"
that companies like Dell offer.

This is what we have. We use Dell and Lenovo Mainly

~~~
ghshephard
Sorry, I didn't mean to imply that you worked for a technology company, let
alone one in the valley. And, agreed, most of our mechanical or electrical
engineers use Windows systems - but pretty much all of our software, firmware,
design teams use Macs of one form or another.

I don't think there is anyone using Linux as a desktop, (outside of a virtual
machine) though we are pretty much 100% linux on the server side (outside of
IT) - where we have several hundred servers, and about 800 employees.

------
djcapelis
Intel's always maintained some of the leading fabs with technology usually a
fair bit ahead of their competitors, but it is losing an entire segment of the
processor design space. It is pretty big news that instead of continuing to
make their own plays at these markets, (which haven't worked out) they're
allowing others to ship their own ARM designs using their fabs. Intel's
competitive advantage has always had a lot to do with the integration and
bundling of world class fabrication technology and their processor designs
pushing each other forward.

They've increasingly broken this cycle in the past few years, with the final
demise of tick-tock and the continued number of devices which opt for ARM.

It's another in a series of developments that are reshaping the processor
market and slowly moving Intel from a dominant position to a supportive one.

There's still a large number of brilliant engineers and amazingly competent
people there. I wonder when they're gonna start really fighting for their
future.

~~~
MawNicker
I'm amazed at the features they've crammed into x86 without breaking
compatibility; Definitely impressive. That being said haven't they perverted
the whole industry with this tactic? It seems like we ought to have switched
from CISC to RISC. From a purely technical perspective at least. Microcode
just seems like a run-time mini compiler. If it were just part of the actual
compiler wouldn't that save power and heat? Could it hurt performance in some
circumstances? Does CISC have any technical merit at all? I would love for
this to have been motivated by something other than their x86 patents.

~~~
dbcurtis
> It seems like we ought to have switched from CISC to RISC.

If you ever have a question about computer architecture, ask two questions: 1)
where does the memory bandwidth go, and 2) where does the die area go. All
else follows from this.

RISC only made sense when CPU clock speeds were at rough parity with central
memory speed, on-chip I-caches were limited, pipelines were short, and
compilers were only good at modest optimizations.

If you look at functionality per instruction byte, RISC is fairly low. In
today's world, CPU clocks are hugely faster than memory speeds, on-chip
I-Caches are huge, pipelines are very very deep, branch prediction hardware is
very good, and compiler back-ends are much much smarter than the peak days of
RISC. CISC wins because the amount of functionality that you can move into the
I-Cache per clock is higher and the amount of functionality you can keep in a
given amount of I-Cache die area is higher, and compilers are good enough to
target specialized instructions efficiently.

Is what Intel has crammed into X86 impressive? Yes, very. And it was damn hard
work. I can tell you that walking all the way out to byte 15 of an instruction
to look at the MOD R/M byte to decide if you have to raise an illegal
instruction exception is a painful long path to squeeze under the clock
constraint. But breaking backwards compatibility is just not something
customers will put up with. So logic and circuit designers get to ply their
trade in it's most convoluted form with the X86.

Perhaps these days I should amend my question list and add a third: 3) where
does the power go? This is where ARM has an advantage over X86. The equations
that you have to resolve to issue an X86 instruction are simply more complex
than for ARM, and all that bit-flipping consumes power.

~~~
gaius
If this were entirely true, VLIW would have been a clear win, but in practice
it wasn't.

ARM conditional execution is very clever.

~~~
gpderetta
> ARM conditional execution is very clever.

also mostly dead in 64bit armv8

~~~
Symmetry
They have a special instruction now to predicate the next N instructions or
not. In out of order implementations you want each instruction to have as few
inputs as possible and my understanding was that the implicit input in the
form of the branch information was causing problems. I've heard conflicting
things about whether ARM processors split predicated instructions into two ops
during decode.

~~~
gpderetta
I'm way out of my depth as I know next to nothing about the ARM ISA, but as
far as I know, there is no special instruction to predicate the next N
instructions; conditional jumps don't count of course [1]. ARM v8 does have a
predicated select instruction, but some form of it are available on many
modern instruction sets.

[1] interestingly, POWER8 is capable of converting unpredictable conditional
jumps over a small number of instructions to conditional execution.

------
hamidpalo
Relevant quote from Otellini, the former CEO

 _" The thing you have to remember is that this was before the iPhone was
introduced and no one knew what the iPhone would do... At the end of the day,
there was a chip that they were interested in that they wanted to pay a
certain price for and not a nickel more and that price was below our
forecasted cost. I couldn't see it. It wasn't one of these things you can make
up on volume. And in hindsight, the forecasted cost was wrong and the volume
was 100x what anyone thought."

It was the only moment I heard regret slip into Otellini's voice during the
several hours of conversations I had with him. "The lesson I took away from
that was, while we like to speak with data around here, so many times in my
career I've ended up making decisions with my gut, and I should have followed
my gut," he said. "My gut told me to say yes."_

Source:
[http://www.theatlantic.com/technology/archive/2013/05/paul-o...](http://www.theatlantic.com/technology/archive/2013/05/paul-
otellinis-intel-can-the-company-that-built-the-future-survive-it/275825/)

------
ChuckMcM
Well that feels a bit like when Intel caved and put the AMD64 extensions into
x86, and a bit not.

I saw an interesting draft of a white paper that was pointing out the
challenge of maintaining a technical advantage when you have to fab your chips
with someone else. Especially if that someone else is under the nominal
influence of a nation state that is hostile to your best interests. It was
arguing that either Global Foundries needed to be "aligned" with US interests
and oversight, or Intel needed to be drafted as "America's chip baker." The
consequence of not doing so would be to create a threat to national security
where the government had no way to procure the volume and complexity of chips
they would need from a source they could be 100% sure was not out to get them.

And then there was this IDF announcement.

It is amazing how hard it is to imagine building a chip company "from scratch"
which includes fabrication facilities. And it is hard not to see how important
such chips have become in our day to day lives.

~~~
walterbell
On the subject of alignment: ARM now belongs to Japan (Softbank), which would
be a TPP participant.

Could other countries pursue open-source chip designs?

~~~
ChuckMcM
The opportunity for countries to pursue open source chip designs already
exists, what is not easy is for a country to develop a semiconductor
manufacturing capability that is equivalent to a modern chip factory.

Everything from sourcing silicon to the wafers to the packaging is such an
amazingly intricate supply chain that it is a huge undertaking to try to
develop it.

That said, I'm interested how you see TPP influencing the evolution (or
distribution) of ARM manufacturers. Or the cost for ARM chips for that matter.

------
woodandsteel
Intel had no choice but to make this move. That is because it has failed in
the mobile and embedded/IoT space, and it isn't selling enough x86 chips to
keep its new fabs up to capacity, so it needs to also make ARM chips.

That said, the economics of this are pretty uncertain. Intel's business model
is to spend an enormous amount of money on process R and D and cutting-edge
fabs so it can produce the most advanced chips, and charge premium prices that
pay off these costs. It can charge such high prices because x86 dominated
computing, and it has had little real competition in the x86 space.

The ARM model, in contrast is to produce large numbers of chips at low cost
for markets with many competitors and intense price competition. If Intel
charges typical ARM prices, it won't be making enough money to pay for its
fabs and R and D costs. If it charges premium prices, it will be more
expensive than everyone else and won't sell many chips, and again won't make
much money. My guess is Intel will go the latter route and make a relatively
small number of premium ARM chips for the highest-end, most expensive
smartphones. Better than nothing, but hardly a great success.

~~~
majewsky
I don't expect a market for highest-end, expensive ARM SoCs. Who's gonna buy
those? The few people that want an expensive smartphone just for the heck of
it are buying iPhones, anyway. The interesting markets right now are China,
India and the developing countries. Good luck selling highest-end expensive
smartphones there.

~~~
simonh
I wouldn't count iPhones out of this. The 10nm process means chips half the
size of those from Samsung and TSMC. I imagine Apple will be very interested
in that. They've also been trying to move completely away from Samsung for
years, but TSMC doesn't have the capacity to carry all their production needs.
Intel does.

In terms of what in 'interesting' it depends what you are interested in. Yes
all the sales growth is in low end phones, but high end phones are still
selling in the hundreds of millions and still commanding decent margins, if
only for Apple at least. That market isn't going away.

------
jhallenworld
Intel already makes chips with ARM cores: Altera's Stratix-10 FPGAs have quad-
core Cortex-A53s and are manufactured on Intel's 14nm process.

~~~
rphlx
They paper launched like 4 years ago, but FWIH they're still not in vol
production yet. Many tapeout delays.

------
tambourine_man
Funny how both Apple and Intel (xscale) had a bet on ARM, chose to abandon it,
only to come back to it later.

Apple's history with ARM is particularly interesting and not very well known
IMO. It looks like this Intel's new move will be at least as fun to watch.

~~~
protomyth
Did Apple really have any choice but to sell its ARM interest?

~~~
tambourine_man
I've heard it was what prevented them from going bankrupt immediately.

The hundreds of millions they got from selling it (at a loss, IIRC) kept the
lights on long enough for them get on their feet again.

~~~
protomyth
I'm pretty sure it wasn't at a loss.

------
throw2016
I find the chain of events a bit ominous frankly. How does Intel's high cost
structure and margins sync with $10-30 SOCs? It's already tried and failed
with its own mobile offerings.

On the other side ARM is beginning to deliver increasingly powerful SOCs that
are at least getting close to Intel's woeful laptop cpu offerings.

It was looking like Intel could be in trouble. I mean why spend $150-300 just
for CPU when you can get a powerful SOC for $10-30 with CPU, GPU and Memory
all in one? There was no way Intel could compete with that.

If ARM desktops started appearing with proper Linux and Windows support, or
Apple decided to put the iPad Pro SOC in a Macbook it could be trouble.
Fortunately for Intel ARM chooses not to focus on this market even though the
potential for low cost desktops and laptops powered by ARM is huge, with great
cost savings for consumers. Driver issues hold back independent efforts.
Vulcan and the new generation of mobile GPUs offer a ray of hope.

Then out of the blue Softbank buys ARM. Now Intel is licensing ARM nevermind
Intel business model does not allow the kind of low cost SOCs ARM is popular
for.

I hope this is not the beginning of ARM SOCs becoming pricey so Intel is less
threatend in its X86 business, that in the absence of competition has frankly
become extremely expensive and uncompetitive.

------
Roboprog
Perhaps in the future Intel will be making "N core" ARM chips for data center
blades, where N is a largish number with a killer bus / cache stack
attached???

Something to be said for low power systems to pass all that relatively simple
web traffic (JSON -> prepared statement ... row -> JSON) between the outside
world and the databases, which might still well benefit from higher power /
performance x86 chips. (who knows, maybe 128 low power cores serves a database
better than x86, also, I can't say -- although being charged per-core by
Oracle for little cores would really suck)

I'm a software guy, so feel free to expand on why this is BS, or not, hardware
guys/gals.

------
avs733
This seems about 3 years to late and 6 years after they should have.
Processors are a symbiosis of design and manufacturing. Intel pursued the
objective function of manufacturing way way to far down a local optimum.

------
baq
this is not unheard of:
[https://en.wikipedia.org/wiki/XScale](https://en.wikipedia.org/wiki/XScale)

still looks like big news

~~~
kikoreis
Actually, this announcement is about licensing ARM's physical IP to enable the
Intel foundries to fab ARM SoCs for other companies, not about Intel building
its own ARM SoCs. I'm pretty sure their long bet on x86 SoCs remains
unchanged.

~~~
cm3
For someone not versed in the specifics of chip engineering, what is the
"physical IP"? Is it the process and how the wafers are made?

~~~
BooneJS
If Soft IP were VHDL or Verilog files, then Physical IP is result of the
physical design of those hardware descriptions into a database for base layer
and masks.

------
jvickers
I wonder if they would be open to fabbing AMD Zen chips.

~~~
wmf
Intel is very open to fabbing their competitors' processors. Open like a bear
trap.

------
xlayn
Another fab should mean options and with that price decrease. I wonder how
much a given chip price can be decreased with this move.

Another way of reading this is that making more use of a given tech should pay
the initial cost faster thus making possible more research and improved
processes.

Sadly another way of reading this is that Intel doesn't have any tech that
would capitalize in better chips anymore.

------
BooneJS
All this to try to win Apple's SoC?

~~~
frankchn
I assume that since Apple already has a license, so their foundries (whether
it be Intel, TSMC, or Samsung) does not need an additional license.

~~~
BooneJS
IANAL, but I assume (perhaps incorrectly) that the fab needs a license to
create a chip containing an ARM processor in it given that it needs the raw
GDS2 database that describes the IP in the detail required to manufacture it.

~~~
trsohmers
The raw GDS2 that the customer (in this case Apple) contains the information
necessary for fabrication, but to make the GDS2 you need to synthesize and
place and route based on a standard cell library. Through their acquisition of
Artisan IP, ARM sells standard cell, memory, and a bunch of other chip IP
other than just their cores, and each needs to be customized to a specific
fabrication process. Intel is paying ARM to customize their IP for their
foundry so that it provides a lower barrier of entry to anyone using ARM IP to
switch from GloFo/TSMC/Samsung/etc to Intel.

Oh, and all fabs require any IP as intricate as a memory or standard cell
library to go through their verification process, as cell characterization is
crucial to getting good yield (and not interfering with any other designs in
the case of multi project wafers).

------
cft
Question is why Intel did not just buy ARM, instead of Softbank?

~~~
cptskippy
Intel really wants to be completely vertically integrated and that would be
hard to reconcile with ARM's decidedly horizontal structure. If they had
purchased them then they'd have probably sabotaged ARM to promote their x86
business so we're better off.

It probably would have been better strategically to buy them and in hindsight
they never should have sold XScale to Marvell but Intel isn't know to
strategize. They just sort of blindly charged forward until they hit a brick
wall then pivot and charge in the next direction. You saw this with Itanium,
Netburst, Atom, and CMOS sensors. It's what they do.

~~~
xenadu02
It's also incompatible with Intel's desire for high margins.

My guess is this is an experiment or a way to burn excess capacity?

~~~
cptskippy
That's entirely possible and they could also spin their own silicon for ARM
instead of just doing a cookie cutter job. This might however end up like
their attempts to take over 4G where they either can't get power utilization
under control or they price themselves out of the market.

------
spullara
They have to do this to get a return on their fabs. You basically have to run
them near capacity and x86 is being used in fewer and fewer devices.

------
jwr
Again?

Perhaps not everyone here remembers, but StrongARM (Xscale) was a thing back
in the day.

------
robot
its pretty interesting that ARM was able to gain so much foothold from the UK
while historically there were so many competing cpu architectures in the
market.

