In recent months, ARM has revoked licenses from Nuvia, a company focused on ARM servers, due to the company’s acquisition by Qualcomm. Then, recently, the company sued Qualcomm to block the use of Nuvia’s solutions, effectively barring Qualcomm from benefiting from the acquisition. On the face of it, this suit doesn’t make much sense because ARM isn’t a server player, so you’d think it would support any of its licensees entering this market. But another aspect of this is that co-development of the computing part by the two companies would, at least on paper, create a better solution than Apple’s M1 processor, which is also licensed from ARM, which may have forced Apple to ARM will ban Qualcomm from building an ARM part of Windows that beats Apple’s MacOS alternative.
Regardless of why this lawsuit was filed, a license provider suing a licensee for doing what the license appears to allow is not only unprecedented, but also demonstrates an unusual degree of control by one or more vendors on the ARM platform. It also suggests that ARM is approaching a period where it may become financially unviable and thus unable to resist becoming a competitive pawn for a powerhouse like Apple.
Maybe it’s time to hedge against ARM development with RISC-V.
The ARM problem is coming
What makes ARM vulnerable to pressures such as those from Apple is that its IPO will not provide the operating capital it will need after the IPO. At the time ARM was about to buy NVIDIA, the money for the purchase went to Softbank, which owns ARM, but NVIDIA promised to finance the company competitively thereafter. In contrast, the IPO simply provided money to Softbank and does not appear to provide significant operating capital to ARM.
ARM is already cutting staff in anticipation of the challenge, with 15% of its staff – or up to 1,000 jobs – expected to be cut. Such layoffs tend to reduce productivity significantly. At-risk employees are focused on finding a new job, which tends to devastate those who remain, and after being laid off, those who remain often also start looking for other jobs because they are overwhelmed by the additional work that those who were laid off were doing.
Because layoffs tend to be done in haste, they can and have led to the removal of critical employees and the encouragement of high-value employees to leave because they rightly believe that layoffs can lead to a company death spiral where layoffs hurt performance, reducing revenue and then justifies subsequent dismissals.
In short, this lawsuit looks desperate, and that desperation may be a combination of pressure from Apple, layoffs, and a poorly executed IPO that doesn’t appear to provide the necessary operating capital for a future independent (from Softbank) ARM.
RISC-V
While RISC-V’s foray into the ARM space to date has mostly been with embedded systems, there’s a reasonable possibility that with growing concerns about ARM’s long-term viability, a non-proprietary, open-source solution may be better in the long run than a proprietary solution from ARM.
RISC-V is open source, an approach much more popular with developers and large users than ARM’s closed source code. Companies like Qualcomm provide most of the value of the ARM technology they develop and sell, and that same capability can be ported to RISC-V, which has much lower licensing fees and potentially much more flexibility. In fact, licensees can do whatever they want with RISC-V cores.
The reason RISC-V is growing and replacing ARM in the embedded embedded market is also supporting the shift from ARM to RISC-V in smartphones. ARM licensing issues are largely a non-issue for RISC-V licensees. The company is partnering with RISC-V International and licensing or partnering with another licensee to build a solution that Qualcomm now opposes ARM, even though Qualcomm acquired Nuvia, making them one company. Both Intel and NVIDIA work with RISC-V; Intel to help fill its FABs, and NVIDIA as an alternative to ARM, which is likely to get more attention now that its attempt to acquire ARM has failed.
One company, Microchip, officially said it switched from ARM to RISC-V because it had lower development and licensing costs, a better long-term outlook, and greater flexibility. In short, RISC-V better served their short-term needs, and especially their low-risk, long-term needs.
Consider RISC-V a hedge
We are entering a period of extraordinary change. We’re redefining where the smartphone ends and the PC begins. ARM is struggling with both PCs and servers, and its recent move against Qualcomm suggests that ARM is now shooting itself in the foot rather than making smart decisions about market growth. Its IPO is problematic because it doesn’t fund ARM as much as it needs to and is basically just buying its freedom from Softbank, but the announced layoffs certainly indicate that ARM will be in a financial position after the merger, putting the platform at risk and making again vulnerable to acquisition or failure.
This is a big short-term and long-term risk. Companies were already hedging their ARM efforts with RISC-V before all this happened. While it’s too early to suggest ARM is being abandoned, these figures suggest that hedging with RISC-V could be crucial in the event of ARM’s failure or acquisition by a company like Apple, which would likely end the ARM licensing problem as it was many years ago with the Mac.
After all, it’s better to have a fallback position because it’s much better to have it and not need it than to need it and not have it. Suddenly, RISC-V looks like a stronger long-term platform than ARM.