Arm adjusts its IP licensing model, with a complete official introduction

Source: This article is translated from " techspot " by the public account Semiconductor Industry Observer (ID: icbank) , thank you.

It’s a headache enough when you have a business model that not a lot of people understand. But if you tweak it a little bit, people get confused even more. That’s exactly the problem Arm is facing today as news of some additional products to its semiconductor IP licensing model has been announced.

But that’s not the case, because the changes are actually quite simple and, more importantly, present some interesting new opportunities for non-traditional tech companies to get involved in designing their own chips.

First, it is very important to understand the basic idea behind what Arm does and what they offer.

For 28 years, the company has been designing chip architectures and then licensing these designs to other companies (such as Apple, Qualcomm, Samsung, etc.) in the form of intellectual property (IP), which in turn use these designs as the basis for their own chips, which they then manufacture through their semiconductor manufacturing partners. In other words, Arm itself does not manufacture chips, nor is it a fabless semiconductor company that only designs chips and then works with chip foundries such as TSMC, Global Foundries or Samsung to manufacture their own chips. But Arm is actually involved.

Yet despite their seemingly distant relationship to finished products, Arm’s designs are hugely influential.

In fact, it’s widely believed that more than 95% of smartphones today are based on Arm CPU designs. On top of that, ARM-based CPUs have begun to make inroads into PCs (Qualcomm’s Always Connected PC chips, sometimes called Windows built on Arm-based Snapdragon chips), servers, and even high-performance computing systems from companies like Cray (recently purchased by HP Enterprise). In addition, Arm designs more than just CPUs. They also design GPUs, DSPs, Bluetooth/WiFi and other communication protocols, chip interconnects, security, and more.

All in all, the company is happy to point out that 100 billion chips based on their various IP designs were shipped in the first 26 years, and that this number will be reached between 2017 and 2021.

Arm hopes to reach that number in part because of forecasts for explosive growth in smart connected devices, the Internet of Things (IoT), which require a certain amount of computing power. While many of the chips powering these devices will be designed and sold by existing chip company customers, Arm also recognizes that many of the chips are also starting to be made by companies that are not traditional technology suppliers.

From home appliance and industrial machine manufacturers to medical device makers and beyond, many companies new to smart devices are beginning to show interest in designing their own chips. While some of these will simply leverage off-the-shelf chip designs from existing semiconductor companies, many of these companies have very specific needs, both technically and financially, for which they are moving toward using custom-designed chips.

However, until now, these companies had to choose which Arm IP they wanted to license before creating their own chips. Needless to say, this business model has hindered their implementation and they don’t give these types of companies the choice they need.

To this end, Arm has introduced a new, flexible access licensing model that allows companies to choose from a large range of Arm IP options (but not all), test and model chip designs through Arm software tools, and then count the IP they actually use and pay for it. In the process, they can use all the features while getting Arm's technical support.

This is obviously a more understandable model for companies that are not familiar with SoCs and chip design, and it essentially provides a "chip IP as a service" type of business service for those interested. However, Arm will still provide traditional licensing methods for companies that want to continue to work as is.

Furthermore, Arm’s highest-performance chip designs, such as their Cortex-A7x series of CPUs, are only available to those who use existing licensing methods.

The Arm chip IP business can certainly be confusing to those who don’t follow the semiconductor market closely, but with this new option, they’re making a large portion of their IP library available to a wider range of potential customers. And that’s bound to drive the creation of some interesting new chip designs and products based on them.