Thursday, September 14, 2023
In a bid to boost profitability and increase the value of the company to potential investors, Arm is developing reference chip designs, it transpired in late April. This week Bloomberg added some more bits to this information, and it turns out that the company is indeed developing system-on-chip designs for various high-growth markets. In fact, Arm confirmed that it was offering its customers to license 'SoC solutions' rather than just IP in its IPO filing with the SEC.
"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," a statement by Arm reads. "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."
Traditionally, Arm's processor cores have been used for various consumer electronics chips, microcontrollers, and smartphones. But more recently, Arm's technologies found their place in considerably more lucrative applications, such as system-on-chips for automotive, client PCs, and cloud data centers. Arm naturally wants a bigger piece of the pie now that its technology is used for devices that are sold for thousands or tens of thousands of dollars.
It is particularly important that many new emerging Arm SoC applications are developed by companies that are not exactly chip companies. For example, automakers and cloud data center providers are not in the business of chips, but they know very well what they need to power their cars or servers. These companies are quite inclined to license a larger portion of Arm IP and add their own IP rather than design their SoCs from the ground up.
Normally, such companies would turn to contract chip designers to build their custom SoCs, and nowadays, such bespoke chip developers are thriving as there are many firms that want to have custom silicon. But it looks like Arm wants to bite a piece of that market and now offers to license the whole (or nearly whole) SoC rather than only core IP.
Arm unsurprisingly does not seem to share too many details about its SoC initiative, but its partnership with Intel Foundry Services focused on Arm's mobile IP, and the Intel 18A (1.8nm-class) fabrication technology may shed some light on the scope of its plans. The collaboration with Intel involves design technology co-optimization (DTCO) and system technology co-optimization (STCO), which work best when implemented for the whole SoC rather than for core IP only. This also means a very deep collaboration to optimize the performance and power consumption of SoC designs, which means very competitive characteristics.
Such a change of business model naturally makes Arm a competitor not only for contract designers of chips, but also for its clients among traditional SoC developers, such as Ampere, Nvidia, and Qualcomm. On the one hand, this is indeed true and these companies are hardly happy about it, especially given the fact innovation of the Arm instruction set architecture (ISA) is Arm's sole prerogative and it takes time to innovate it. Yet, because Arm's ISA is so pervasive, these companies will go anywhere else and will keep using it until the competing RISC-V architecture becomes as widespread and widely supported as Arm's
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