The leading customer of processor technology licensor ARM Holdings plc (Cambridge, England) by revenue contribution in 2010, according to Nomura Equities Research, comes as a bit of a surprise. The financial brokerage and analysis house says it was Intel Corp (Santa Clara, CA).
That was my reaction too and it begs the question: what ARM-supplied services, licenses or royalties was Intel paying millions of dollars for in 2010? ARM’s revenue in 2010 was $631.3 million so a 7 percent contribution means that about $44 million flowed from Intel to ARM—according to Nomura.
I am scratching my head to make sense of this. Could it be some hard disk drive controller that Intel makes by the bucket-load includes an ARM core? Or is there some ARM core that has made its way into some dusty, otherwise-forgotten corner of an Intel memory controller or image processing block that has ended up in an Intel microprocessor?
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Wouldn’t it be safe to assume that those are just licensing fees for use of patents ARM may hold? That only implies that they were the highest single contributor to revenue, not that any physical product was ever shipped to them. They are listed with other companies on the wiki for ARM… Then again, I wouldn’t be surprised if Intel acquired some ARM chips for reverse engineering purposes, I mean they are competitors and this is the 21st century…
ARM don’t have any physical product or fab, they purely generate Intellectual Property. i.e. Designs for other people to fabricate. There are no ARM chips from ARM. In effect their income is all licensing fees.
Intel bought DEC/Digital’s StrongARM (ARM v4) cored processor family, which they evolved to the ARM v5 cored XSCALE. Puzzlingly, though, they sold XSCALE to Marvell a few years ago, yet still own the ARM v5 licence, so maybe some of the money is coming from Marvell, via Intel, to ARM.
Remember also, that ARM design modules such as I/O, floating point cores, vector interrupt handling etc, so it is possible that Intel are using this IP inside it’s own embedded micros etc.
Although I believe Intel may reverse engineer (it makes good engineering sense anyway), many large companies have found to their cost just how expensive it is it infringe other companies’ IP, and find it better to licence its use legally and openly. Indeed Intel and AMD have a mutual agreement to use each others patents.
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Additional: Two Degrees, but I am clearly too stupid to function as a human. I just spent 10 minutes trying to drag the colour strips, type in numbers and use cursor keys. Turns out you drag the box instead. Sigh.
@Brad: ARM does not manufacture CPUs, and they ship no physical product. Instead, they create detailed CPU designs and license their designs to other companies for production. Those companies are free to modify the design for their purposes. So Apple, Qualcomm, Samsung, NVIDA, etc. all pay ARM license fees to produce their own ARM processors.
It is possible that some of the companies on this list are paying for patents rather than ARM designs, but I still think processor designs should be the bulk of their income.
“Wouldn’t it be safe to assume that those are just licensing fees for use of patents ARM may hold?”
ARM *only* sells their IP. They do not produce chips for sale. The intent is to integrate their IP into your chip design. So it isn’t just “safe to assume”, that’s what those numbers represent.
“I wouldn’t be surprised if Intel acquired some ARM chips for reverse engineering purposes,”
I find it hard to believe Intel bought $44million dollars in IP and services just for “reverse engineering” purposes. Even more so, I find it difficult to believe ARM would sell them that much for that reason.
Intel have an ARM licence and have done work with ARM cores for nearly a decade now (StrongARM then XScale). Maybe that’s the licence cost?
Buying physical ARM chips won’t have anything to do with it – ARM don’t make their own chips, they get their income from licensing the designs for ARM cores to other companies.
TSMC i a bit of a surprise for me. I assume this is for custom designs for customers, but I didn’t realize design work would represent such a significant chunk of their business. Many ARM vendors use them to manufacture their wafers (there are hardly hundreds of modern fabs out there), but I’m curious what those numbers represent. Cross town rival UMC is also listed in the top 10???
As for ARM and Intel, a very big part of ARM’s IP isn’t just MCU cores. They also license a huge variety of other designs like external memory controllers, LCD controllers, IO blocks for things like SSP/SPI, etc. Some of that is almost certainly (as others have mentionned) payment due to patent infringement and licensing agreements.
That said … I’m always amazed that ARM doesn’t make more money than it does for the ubiquity of their IP! Of course … part of the reason it’s everywhere may also be the reasonable licensing fees.
I worry the likes of Apple will buy-out ARM (patents) and then proceed to use corrupt Trial Lawyers to sue everyone else out of business over time. Doom and gloom…?