What happens when everyone is designing their SoCs with cores licensed from ARM? Where's the differentiation?
However, it must not be forgotten that it takes considerably more resources – time and people – to develop an ARM-compatible processor core then to successfully embed that core and derivatives in a system-chip that wins market share. But for those few companies that do have the vision, resources and the engineering management to start early enough so that they can hit the market with the right chip at the right time, it is a winning proposition.
It is impossible to know how much of Apple's and Qualcomm's success with application processors can be attributed to the fact that they now roll their own processor cores. But successful they are. It could be something as simple as this--only the big companies have the resources to justify an ARM architectural license and big companies usually win in the end.
But even if it is something that simple, does consolidation in the semiconductor industry mean that there will be fewer, bigger companies and their need to differentiate themselves from each other will favor the use of ARM architectural licenses over individual core licenses going forward? Such consolidation may even favor the adoption of newer architectures or re-engineered combinations such as MIPS-PowerVR from Imagination.
The answer to the question probably depends on whether you believe in a consolidating or steady-state chip universe. Those in the latter camp will argue that while consolidation may be going on at the top of the industry there is a continual flow of applications and startups emerging to serve those applications, so that the total headcount remains roughly static. Certainly for a startup company licensing an ARM core to get to market quickly would be one cost-efficient way to go – so long as that startup is not trying to go head-to-head against an entrenched giant.
One other thing that will change the dynamic is that Moore's Law is running out of steam as it becomes more expensive to progress to the next node. It is arguable that as companies are going to spend longer on each given node and are therefore looking to make more differentiation in design as the benefits of cost and power reduction from migrating nodes are more expensive to achieve and less easy to justify.
More differentiation in design may suggest to more enlightened and better endowed companies that an ARM architectural license gives a greater chance of success.
It would be a simplistic counter argument to say that in modern equipment, gadgets and systems it's the software that makes the difference. It's true that at compile time the software doesn't much care whether the ARM processor it is going to run on is the most elegant of proprietary designs or the most widely used vanilla building block. But it is also true that it is processors designed and optimized for a particular application and set of use cases that have the best chance of turning in best-in-class power and performance measurements.
Finally it must also be recognized that the business dynamics around licensing processor intellectual property are different in different industry sectors. So while we may have seen the emergence of architectural licensees and custom ARM processors to address the mobile market and we may yet see the same for server and networking infrastructure that is not the case in the industrial or automotive sectors. There, where microcontrollers are often the hardware of choice and flexibility, peripheral cores and a great chunk of software are the differentiators, I don't see much temptation for ARM licensees to do anything but keep taking the cores.
Would it be a good time to point out "The Linux Factor"?
The reality is that something as complex as an O/S, a core, etc. ... which are increasing in complexity, requires an entity to take care of it. Somewhere to go for technical support, someone to ensure accuracy, roadmap, etc. Someone to yell at when things don't work.
For the foreseeable future, that is going to be Arm for a large portion of the processor space. You are right, ARMs revenue is not enourmous. For that reason, its a good ROI for licensese to pay them so that they can concentrate on what they do.
Apple is not a processor company. They are an ecosystem company. Samsung is a consumer products company with a semiconductor company. Qualcomm provides communications, etc. While the processor core is important, at the end of the day, it is not the business these companies are in, it is an enabler.
That is what Peter's article is about. For those who have the resources to try to differentiate their core business through a processor license they will. I.e. Apple, etc. For those where the core does not differentiate the product, i.e. a microcontroller, then they will stick to ARM as the core is not seen as a differentiating feature in that market.
Of the total spend on semiconductors, what percentage do you think goes to processor cores outside of the PC industry?
It's okay though, I have always thought myself in the Electronics industry, not the Semiconductor industry.
I think the power/perf numbers for Intel's Clovertrail and Medfield refute ARM's putative power efficiency advantage.
But other major take away is that in terms of power efficiency in mobile form factors, the core is not that significant an energy consumer. Most detailed power analysis show that:
1. the screen
2. the DRAM
3. wireless PHY,
4. Network protocol processor
are the top consumers of energy roughly in that order.
Consequently, a low-cost, reasonably performant CPU is desirable for which ARM is a good fit.
As was previously stated, ARM's fairly mature software stack (and EDA stack)also make it appealing despite the fact that the ARM ISA is crufty; it's 20+ years old and can't really be called RISC anymore.
Nevertheless, ARM is cheap to license at any level and the royalty payments per chip are modest.
IMHO, the core no longer provides competitive advantage; it's the other accelerators and PHY ASICs (and the tools that enable developers to leverage them) that will differentiate SoCs.
Big bucks is a subjective term. So let's quantify it.
In 2011 ARM's annual revenue was $785 million. In 2012 it will probably be about $900 million.
A combination of Apple, Samsung, Qualcomm and many others, are voluntarily stuffing that much money into ARM's pockets.
I would not agree that ARM is going to destroy the Industry. I do believe that the ARM universe will go through a lot of consolidation and drop-out. Most (if not all) successful industries do. It's part of the natural evolution of an industry.
Whether Apple or Qualcomm are winning because of ARM is a different question. The fact that ARM processors hit the right performance level, power frugality and cost targets allowed Apple to create their phones and tablets. Of course, Apple's phones and tablets have grown that market need so each begets the other. ARM and Apple are both an integral part of each others' success.
However, if not ARM, then perhaps it would have been MIPs or a low-power AMD offering. The need would have hit at some point and someone would have found or made a solution if ARM weren't there to provide it. The timing may have been different, but not by much.
The argument in business is always compete with yourself because if you don't someone else will.
If ARM is not part of the success or necessary to the success of Apple, Qualcomm and others, one wonders why they pay out the big bucks to ARM at all. Why not invent their own architectures or license an alternative?
So if ARM is going to destroy the semiconductor industry....who, in your opinion, will pick up the pieces and be ultimate winners?
@ Peter, dont bite the hand (ARM) that feeds you. ARM is going to destroy the Semi industry by commoditizing before dying a brutal death. You talk of Apple and QCom winning. QCOM is winning not because of ARM core, but it can sell silicon at cost and making profit on licensing. We all know how Apple is winning. Again, not because of ARM core. That leaves a bunch of ARM losers such as Nvidia, Marvell, BRCM, STE, STM, etc. etc. Time is ticking for these losers to get and so is for ARM.
Not sure Qualcom and Broadcom are hunting same target (litteral translation of french expression).
Qualcom's Krait CPU architecture matters for chip buyer or final customer, while Broadcom's one matters for Broadcom at least for SoC I had to play with: What Broadcom offered me what a SoC with right network protocols/interfaces features, plus ability to run a standard OS to drive said features.
Always regarding Broadcom, I wonder if developping a new CPU architecture while some different in-house ones already exist is that difficult ? (for experts, of course)