December 9, 2023

PBX Science

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ARM new plan on licensing fee rejected by most companies

4 min read

ARM new plan on licensing fee rejected by most companies


ARM new plan on licensing fee rejected by most companies.

ARM planned to charge licensing fees based on the price of the end product. Most OEMs companies are against it.

ARM, the world’s top chip design company, was stopped by regulators when it tried to sell itself to Nvidia. According to Japan’s Softbank’s plan, the British company may eventually go public.


ARM new plan on licensing fee rejected by most companies


In the past two years, Japan’s Softbank has also been in trouble, so it is indeed a good choice to let ARM go public as soon as possible, but it may not be the focus of ARM’s plan. Royalties.

Netizens who are familiar with this statement may remember that Qualcomm did this before, and it also caused many lawsuits with OEMs. ARM decided to do this after Qualcomm’s lessons learned.

ARM is going crazy! It is planned to charge licensing fees based on the price of the end product. Most domestic and foreign OEMs are against it.




ARM’s new plans:

According to the British Financial Times, ARM plans to overhaul its business model. The new plan is to increase prices in all aspects and charge “several times the current” fee for chip licensing.


ARM wants to stop charging chip suppliers to manufacture ARM chips and instead charge device makers, such as smartphone makers, that eventually carry ARM chips, based on the overall price of the final product.


Here is just an example: For example, Xiaomi wants to produce a mobile phone equipped with Qualcomm Snapdragon SoC, which is based on the ARM architecture. Qualcomm previously signed a licensing agreement with ARM that extended to anyone who bought Qualcomm’s ARM chips.


Although Qualcomm has also made its own contribution to the production of ARM chips based on ARM’s technology, Qualcomm is only a reseller of ARM in terms of licensing agreements.


ARM’s new licensing model hopes to collect licensing fees directly from Xiaomi, and ARM requires Qualcomm (such as chip manufacturers) not to sell ARM chips to any customers who have not signed an agreement with ARM.


That is to say, there are two fundamental changes in the new plan: first, customers who do not agree to pay licensing fees directly to ARM will not be able to purchase any ARM chips; Pay for the chip, after all, Qualcomm will not work in vain.



ARM discussed with some OEMs but was rejected:


According to reports, ARM has discussed the matter with some partners and plans to launch a new fee model in 2024.

However, the Financial Times speculates that these current customers who have used ARM chips for a long time may continue to use the old licensing model in the next few years based on existing contracts, rather than immediately switching to the new licensing model.


At the same time, ARM has informed MediaTek, Ziguang Zhanrui, Qualcomm, and several Chinese smartphone manufacturers such as Xiaomi and OPPO, but the Financial Times added that ARM is frustrated by customers’ reluctance to accept the new arrangement.


Obviously, neither Qualcomm nor terminal equipment manufacturers are willing to accept this new model, and it is normal for ARM to be frustrated.


Masayoshi Son tests the market value of ARM’s monopoly:

In the field of mobile devices and even the field of Internet of Things, ARM chips are the absolute main force.

It is not an exaggeration to say that ARM has monopolized the market.

And now the new authorization model planned by ARM is undoubtedly testing the value of the monopoly market.

Considering that ARM has not yet been listed and the controlling shareholder is still Masayoshi Sun, it is impossible to say that Masayoshi Sun has no idea or nods behind it.


In fact, ARM may have no choice but to do this in the market, because ARM has formed a monopoly. Unless regulators intervene and use administrative power to interfere, chip manufacturers or OEMs as midstream and downstream can only be forced to agree to the agreement, otherwise they will not be able to obtain ARM chips are out.


What’s interesting is that now we all suspect that Google seems to have discovered that something is wrong with ARM. In the past few years, the Android system’s support for RISV-C has been tepid . The platform provides Android support and is equivalent to ARM.


Google plans to fully support RISC-V in the next few years, not the kind of foolish simulator support, but everything from prototype to operation will be redeveloped to truly natively adapt to RISC-V.


Are you saying this is a coincidence? It may be a coincidence, but they are all industry giants. It is hard to say whether Google has obtained the news from ARM in advance.

If ARM notified Google in advance, then Google must not agree, otherwise it will not suddenly announce its full support for RISC -V architecture.


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