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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Arbee - Friday, June 28, 2013 - link
AMD's clones up through the 486 were true clones of the relevant Intel parts. For the Pentium Intel stopped allowing that and AMD started making their own designs, which at first weren't all that good.ShieTar - Friday, June 28, 2013 - link
Even these days, AMD is somewhat forced to at least copy the INTEL instruction set. At this point, Intel definitly profits from the situation, whatever they decide to include for their CPU, AMD needs to support soon enough in order not to fall back.fluxtatic - Monday, July 1, 2013 - link
The new arch Intel made was Itanium, as they were hoping to get away from x86. We all know how well that worked out.What put AMD behind was Intel's incredibly dirty tricks around the days the Athlon64 was stomping all over Intel - all the backroom deals with Dell and HP, among others, to keep AMD parts out of PCs. Intel would kick in significant amounts of money in both marketing dollars and straight (very illegal) kickbacks to companies that were willing to play ball.
It ended up settling a couple years ago, with Intel paying around $2 billion, as I recall, but that was far too late for the damage done to AMD.
And to Wolfpup's point - there's likely not even money changing hands between Intel and AMD these days - they've both got significant contributions to the x86 architecture that are covered by the cross-licensing agreement. However, likely a lot of the newer features Intel has developed aren't covered, and AMD has to clean-room reverse engineer them if they want to include them in their own designs.
Scannall - Friday, June 28, 2013 - link
There were many reasons for them licensing x86 at the time. And there used to be a whole lot of licensees. AMD is just the last one standing. Other manufacturers were coming up with very good and compelling CPU architectures, and there was really no standard per se. Between contract requirements, and many companies using licensed x86 IP it became the 'standard'.So it looks to me like it was far from a mistake. Use all the licensees to get your architecture king of the hill, then grind them into the grave. Big win for Intel.
rabidpeach - Saturday, June 29, 2013 - link
so arm could be early intel.1. build up cash pile thru licensing
2. buy a fab
3. make it make your exclusive next gen processor that isnt licensed
4. sell it and destroy all the commodity producers
this strategy would need intel to stay on the sidelines.
TheinsanegamerN - Sunday, June 30, 2013 - link
except amd went and sold its fab.slatanek - Friday, June 28, 2013 - link
Great article Anand! It's actually something I have been thinking for a while too (ARM). But I have to admit I miss PODCASTS too! (I'm not the only one as it seems)Callitrax - Friday, June 28, 2013 - link
I'm not so sure the statement "In the PC world, Intel ... ends up being the biggest part of the BoM (Bill of Materials)" is all that accurate. I know it hasn't been for me for 10+ years, the largest part of my BoM is I think the same as a mobile device - the display. Anybody running multiple displays or 1200+ vertical lines (which probably constitutes a large fraction of the readers here) spent spent somewhere between $300 and $800+ dollars which means that they would need an i7 at the low end or i7 extreme at the high end (+PCH) to for Intel's cut to exceed the display cost. And for that matter Samsung just topped the processor in my computer (SSD).* okay technically you could break the monitor BoM into payments to a few companies, but my panel I would guess still exceeds my cpu since the display was $600 on sale.
** and the economics get fuzzed up a little since desktop displays can last through several cpus (mine is on its 3rd cpu and 4 graphics card) whereas mobile device displays are glued to the cpu.
mitcoes - Friday, June 28, 2013 - link
it is possible we will see future ARM64 models where the SoC is plugged in, even a standard connector / format, and be able to upgrade the SoC 2 or 3 times as we do actually with desktop computers. I suggested it to several brands, and I suposse they read the suggestions, and perhaps one will do itname99 - Friday, June 28, 2013 - link
It makes zero sense to optimize for something that is cheap (and part of a cheap system). The days of replaceable cores are gone, just like the days of replaceable batteries. Complaining about them just reveals you as out of touch.There is good physics behind this, not just bitchiness. Mounting which allows devices to be plugged in and out is physically larger, uses more power, and limits frequencies and so performance. There's no point in providing it in most circumstances.
Next to go (for this sort of reason) will be replaceable RAM. It's already not part of the phone/tablet/ultrabook experience, and at some point the performance limitations (as opposed to the size and power issues) will probably mean it's also removed from mainstream desktops.
Complain all you like, but physics is physics. The impedance mismatch from these sorts of connectors is a real problem.