The ARM Diaries, Part 1: How ARM’s Business Model Works
by Anand Lal Shimpi on June 28, 2013 12:06 AM ESTTypes of License
Although I wrote about there being three high level license types (processor, POP and architectural) in reality there’s a spectrum of options that ARM offers.
Academic licenses are effectively free. You can’t sell any designs but it’s a great way to build familiarity with an architecture. DesignStart is a low cost option for an academic/research arm of a company. Again, neither of these designs can be sold which is why the up front fee is very low/effectively zero.
ARM offers single use licenses for companies who just need a particular core for a single project (e.g. I want to build a single design based on the Cortex A9). A single use license for a Cortex A-class CPU will be somewhere around $1M up front plus ~2% per chip sold. The single use licenses are really useful for startups or very specific design needs within a company.
Multi-use licenses make a bit more sense for larger companies with multiple products. Here you get a larger up front fee but you can use your licensed CPU design within any number of products within a certain period of time (e.g. 3 years). During that time frame you can design as many products as possible, but you cannot begin any new designs after the 3 year period ends without a license renewal.
Perpetual multi-use licenses are more common in larger companies. These allow the licensee to use a core in any number of devices, indefinitely. As some ARM licensees can keep the same core in use for 10 - 20 years (particularly in industrial applications), the perpetual multi-use license gets a fair bit of use.
The subscription license is quite possibly the most interesting out of the pyramid. Companies can purchase a subscription license to ARM’s entire portfolio of products, for a set number of years. What a subscription license really enables is engineering managers within a company to start a chip project without having to worry about asking for budget for a large up front license fee since the company as a whole has already paid it. The up front fee here is multiple times the $10M top end for a standard part, for obvious reasons.
Finally at the top of the pyramid is an ARM architecture license. Marvell, Apple and Qualcomm are some examples of the 15 companies that have this license.
The Chosen Three
Since ARM doesn’t actually make any chips of its own, it needs to ensure that for each generation there are launch partners that will produce designs based on the latest and greatest. For each new microprocessor IP, ARM chooses up to three partners to work very closely with. The reason for choosing three is to hopefully work with companies targeting multiple markets. We tend to focus on the high-end smartphone/tablet SoC space here, but ARM architectures find their way into industrial, digital home, TV and other markets as well.
These companies get earlier access than any other licensee to whatever new microarchitecture ARM is working on. The licensees in exchange help debug and test the IP, even providing feedback directly to ARM. The benefit to the licensee is the potential for a significant time to market advantage on the new microarchitecture.
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Krysto - Friday, June 28, 2013 - link
"It must frustrate ARM just how much attention is given to Intel in the ultra mobile space, especially considering the chip giant’s effectively non-existent market share"Well, it helps to have people like you Anand, who make baseless statements such as "Haswell will take over tablets and beat ARM", a whole year before you even know the details about the Haswell architecture or review it.
Maybe if the media didn't fall for Intel's misleading marketing and press releases so easily, Intel wouldn't get as much attention with nothing to show for it.
cnxsoft - Friday, June 28, 2013 - link
Interesting no growth at all forecast for the "Desktop PC and Servers" up to 2017. What about ARMv8 based servers? Or is it in another category (Networking?).I also thought ARM had a bigger market share in micro-controllers, but 8-bit and 16-bit designs still have a significant market share, so I guess that's partly why.
bill5 - Friday, June 28, 2013 - link
Anand might find it interesting that according to a forbes article, ARM was one of the two finalists for Sony/MS next gen consoles...They supposedly had a performance "bake off", and decided on the Jaguars. With the caveat that although ARM would not be ready with enough performance in time for PS4/XB1, they would be soon after. So, evidently they just missed.
bill5 - Friday, June 28, 2013 - link
linkkkkk http://www.forbes.com/sites/patrickmoorhead/2013/0...A5 - Friday, June 28, 2013 - link
I believe it. I'm thinking A57 will match or beat Jaguar performance, but it wasn't going to be ready for a Q4 2013 mass production launch. Considering that the home console environment is particularly power-constrained, there was probably no reason to wait for ARM to be ready.A5 - Friday, June 28, 2013 - link
*is not, damnitmaybeimwrong - Friday, June 28, 2013 - link
I've been a fan of AT since the 90s, and will undoubtedly continue to be; there's no better tech site out there. That said, I'm uncomfortable with these "Featured Reviews." Perhaps I'm making unwarranted assumptions, but I can't help but read that phrase as "this article was commissioned by a third party, and may remain at the top of the main page for longer than it would have in the absence of payment." I'm not interested in what advertisers think should be featured; I want to see what Anand thinks should be featured. I understand that advertising pays the bills, but there will be far fewer advertisers if readers stop believing in the integrity of the site. While I'm sure this reads as an overreaction, allowing money to dictate editorial content is a slippery slope. Anand, please be careful with these advertising programs.Ryan Smith - Friday, June 28, 2013 - link
In this case I can assure you that you're reading into "featured review" a little too much. Anand likes to use that label for his major industry articles; this article wasn't commissioned by anyone.It also won't remain at the top of the page any longer than any other article. All of our articles are bumped down sequentially based on date of publication.
maybeimwrong - Friday, June 28, 2013 - link
Thanks for the clarification, Ryan. I was paranoid because some of the language in the advertising section seems to allow for the kind of scenario I described. I know articles are bumped down in order of publication, but that doesn't mean the timing can't be adjusted to feature some articles more than others. Keep up the good work :)THF - Monday, July 1, 2013 - link
Well, how is he able to publish the "please do not publish without approval" presentation slides then? Some degree of ARM approval must have been involved in this article.