
Report: ARM is for sale and Nvidia’s interested, Apple isn’t - _JamesA_
https://arstechnica.com/gadgets/2020/07/reports-arm-is-for-sale-and-nvidias-interested-apple-isnt/
======
simonebrunozzi
I 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
True, 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
Nothing 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.

~~~
klelatti
My impression (based on a talk with both Simon Seegars - ARM CEO - and Jeff
Williams - Apple COO - onstage) is that the relationship is pretty close.

You'd expect that ARM would be pretty responsive to the needs of one of its
highest profile customers especially given the history and there is no reason
why that would change with any sale.

~~~
blinkingled
That's the current story - where ARM is independent. If a competitor buys it
and decide to not invest as much in ARM or keep things for themselves that's
where this discussion plays off. I was saying it won't matter much for Apple
but on the other hand Apple buying them would be a much worse outcome for the
industry as a whole.

~~~
pankajdoharey
I think if someone anyone who buys a 32+ Billion dollar company would want to
get returns from it, so surely they won't stop investing. The problem really
is if it is someone like NVIDIA then they have this rent seeking behaviour.
Which almost everyone is trying to run away from. For instance In the cloud
NVIDIA shuns the usage of its commodity GPU's through the use of EULA and
force you to buy there expensive and overpriced Cloud GPU solution. This kind
of behaviour effectively puts NVIDIA in the category of Ransomware. So I am
only concerned that Nvidia doesn't buy it. Anyone else is fine.

~~~
wahern
> Anyone else is fine.

Even Qualcomm?

~~~
pankajdoharey
Well Yeah forgot about them, Qualcomm too has this rent seeking behaviour with
their Modems where they ask for a share of the profits from the phones. Maybe
someone from the industry who doesn't rent seek.

------
ChuckMcM
Interesting 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.

~~~
bfuclusion
The day a RISCV SOC on par with the Raspi 1, is the day I never buy another
ARM board. It'd be nice if the whole SOC is open cored like the CPU, but I'll
take what I can get.

~~~
klelatti
Genuine question. Why is this the case? What would a RISC-V board enable you
to do that you can't do with an ARM board today?

~~~
bfuclusion
Mostly have a hope of having a bootloader process that doesn't hinge on
binaries. I mean at some level I may have to, but it's really annoying I can't
move an image from machine to machine even though the arch is all the same.

~~~
klelatti
But that's not an ARM issue is it? PI has strange boot by GPU but issue is SoC
implementation I think not CPU architecture.

~~~
bfuclusion
Right, it's not CPU arch, but there's a much higher chance of having the
entire thing open arch if the CPU is. I expect the probability of reaching a
de-facto "standard" SoC to be much higher in RISC-V and I'll take the pain of
being the early adopter.

~~~
klelatti
I have a lot of sympathy but fear that RISC-V will lead to even more
fragmentation than we see with ARM - eg proprietary extensions. PC
standardisation is largely due to the level of control that a couple of
dominant vendors have not due to the status of the IP in the core.

~~~
nix23
>I have a lot of sympathy but fear that RISC-V will lead to even more
fragmentation than we see with ARM

Don't fear change, it's a cool thing.

------
starfallg
The 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.

~~~
sitkack
There has been no meaningful antitrust action in over a decade. I wouldn't
bank on it.

~~~
ben_w
A 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
How'd that work out for the bankers and stock traders?

~~~
rurp
It 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.

------
klelatti
I 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.

------
AWildC182
I 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
I 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
What is an IR?

~~~
moreati
[https://en.wikipedia.org/wiki/Intermediate_representation](https://en.wikipedia.org/wiki/Intermediate_representation)

------
2bitencryption
can 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?

~~~
Kipters
I 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
Why 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?

~~~
bryanlarsen
AFAICT, ISA's are heavily patent protected. The patents are usually on
implementation details, but it's difficult to implement without stepping on
the patents, so...

Intel & AMD have a cross license, x86-64 was actually created by AMD. And
before then, (ie, in the 70s & 80s) Intel was forced to license to third
parties to qualify for defense & government contracts.

~~~
derefr
I assume the "forced to license to third parties" part applies in the case of
the Zilog Z80?

But re: patents, in the case of Cyrix:

> Focused on removing potential competitors, Intel spent many years in legal
> battles with Cyrix, consuming Cyrix financial resources, claiming that the
> Cyrix 486 violated Intel's patents, when in reality the design was proven
> independent.

[And this is _despite_ Cyrix having white-box reverse-engineered Intel's chips
to figure out how to be software- and socket-compatible with them! That
seemingly didn't matter, as long as in the end the design they actually put in
their own chip wasn't encumbered by Intel's patents.]

> Intel lost the Cyrix case, which included multiple lawsuits in both federal
> and state courts in Texas. Some of the matters were settled out-of-court and
> some of the matters were settled by the court. In the end after all appeals,
> the courts ruled that Cyrix had the right to produce their own x86 designs
> in any foundry that held an Intel license. Cyrix was found to never have
> infringed any patent held by Intel.

With that case-law in place, it sounds like anyone demanding that third-
parties license their ISA these days is effectively bluffing.

------
Despegar
The most likely outcome for ARM is that it goes public again rather than being
bought out.

------
H8crilA
Nvidia'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
Softbank 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
I think Son is looking for the next big thing, probably something about shared
workspaces.

~~~
imtringued
Didn't they already have such a business? Wasn't it called WorkForMe (Me =
Adam Neumann)?

~~~
BbzzbB
It is the debacle I was referring to.

------
jupp0r
Just 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
True, 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.

~~~
cpeterso
Intel 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
> 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?

------
fischert
The situation seems pretty fucked-up with China CEO Allen WU refusing to leave
after being fired. [https://www.electronicsweekly.com/news/business/arm-china-
as...](https://www.electronicsweekly.com/news/business/arm-china-asks-beijing-
government-intervene-row-arm-uk-2020-07/)

------
evilelectron
Why 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.

------
Zenst
Apple 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
> 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.

------
wronglebowski
Is 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?

~~~
smabie
T-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.

------
dangjc
ARM 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
ARM IPO'd in 1998; they were publicly held till acquired by SoftBank in 2016.

------
protomyth
I'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.

------
solarkraft
How 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?

~~~
imtringued
There 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.

------
aleppe7766
A 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
I 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.

------
WhatTheFrick
What 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?

~~~
toyg
It's been rumored for a week that SoftBank is pondering a sale, but the fact
that SB is hurting for cash has been common knowledge for a while now.

------
ETHisso2017
Why doesn't TSMC buy ARM?

------
smallnamespace
Given 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.

------
chvid
How 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
Or 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?

~~~
mjw1007
The 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
Do you (or anyone else) know where I can read about that?

~~~
trasz
Just google for "ARMv8".

(Also, it's not like ARM was a single instruction set before either. For quite
some time ARM had two totally different instruction encodings, the "usual
one", and Thumb2, with microcontrollers usually only supporting the latter.)

------
dwild
I 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.

------
naves
What if it gets acquired by a Chinese fund/conglomerate?

~~~
trasz
Which might have been the best possible outcome from the global point of view.

------
tmaly
If 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.

~~~
klelatti
Not 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.

------
baybal2
If I were AMD, I would've done just anything to prevent ARM going to a single
vendor in their ecosystem, Nvidia particularly.

------
sys_64738
ARM Holdings is the IP licenses it sells is it not? I don't think ARM Holdings
does HW design, or do they?

~~~
AlphaSite
Are also sells actual cores and blocks. They do a lot more than just the arm
spec.

------
slim
I wouldn't invest in ARM if they can't sell to Chinese companies

~~~
greatjack613
Why not?

~~~
slim
it seriously limits it's growth

------
commandlinefan
I never was able to figure out why ARM was so much more popular than MIPS. ARM
always felt unnatural to me.

------
throwmemoney
The 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.

