ANALYST VIEW by Rob Enderle

Analyst View

BY ROB ENDERLE

It’s time to consider RISC-V

Over the last months, ARM has pulled licenses from the ARM server-focused company, Nuvia, because of Qualcomm ’ s acquisition of that company. Then, recently, it sued Qualcomm to block the use of Nuvia ’ s solutions, effectively restricting Qualcomm from benefiting from that acquisition.

This suit made little sense on the surface because ARM is not a player on servers, so you ’d think it would support any of its licensees going into that market. But another aspect of this is that the joint development of a PC part by these two companies would, at least on paper, create a better solution than Apple ’ s M1 processor, also operating under an ARM license, which may have caused Apple to force ARM to block Qualcomm from creating a Windows ARM part that would outperform Apple ’ s MacOS alternative.

Regardless of why this lawsuit was filed, a licensing vendor suing a licensee for doing something the license appears to allow is not only unprecedented but suggests an unusual amount of control by one or more vendors on the ARM platform. It also indicates that ARM is moving into a period where it may become financially unviable and thus unable to resist becoming a competitive pawn for a powerhouse like Apple.

It may be time to hedge ARM development with RISC-V.

ARM’s coming problem

What makes ARM appear to be vulnerable to pressure such as what Apple may be applying is that its IPO won ’t provide the operating capital it will need post-IPO. Back when ARM was going to be acquired by NVIDIA, the money for the purchase would have flowed to Softbank, which owns ARM, but NVIDIA had pledged to fund the company after that at competitive levels. The IPO, in contrast, just provided the money to Softbank and doesn ’t seem to provide much in the way of significant operating capital to ARM.

ARM is already downsizing in anticipation of that problem with 15% of its staff — or up to 1,000 jobs — expected to be laid off. Layoffs like this tend to reduce productivity substantially.

Because they tend to be done in a rush, layoffs can and have removed critical employees and incented high-value employees to leave because they rightly anticipate that layoffs can lead to a company death spiral where the layoffs do execution damage, which cuts income and then justifies subsequent layoffs.

In short, this litigation looks desperate, and that desperation may be a combination of Apple pressure, the layoffs and a poorly conceived IPO that doesn ’t appear to provide needed operating capital to the coming independent (from Softbank) ARM.

Rob Enderle is a principal analyst at the Enderle Group.

RISC-V

While RISC-V’ s encroachment into the ARM space has mostly been with embedded systems to date, there is a reasonable chance that with the concerns for ARM’ s long-term viability increasing, an open source, non-proprietary solution could be better long-term than the proprietary solution from ARM.

RISC-V is open source, an approach far more popular with developers and large-scale users than ARM’ s panies clos like ed source. Com Qualcomm pro WththeconcernsforARM’s vide much of the value to the long-termviabilityincreasing, AR op M te and chnology sell, and they this develsame anopensource, non-proprietary capabi ferred lity to R could ISC-V, be transwhich has solutioncouldbebetter. much lower licensing fees attached to it and potentially far more flexibility. Effectively, licensees can do what they want with RISC-V cores.

The reason that RISC-V has been growing and replacing ARM in the embedded market also supports the move from ARM to RISC-V on smartphones. The licensing issues with ARM are largely not a problem for RISC-V licensees. A company works with RISC-V International and licenses or works with another licensee to create a solution, something that ARM is currently objecting to Qualcomm doing, even though Qualcomm purchased Nuvia, making them one company now. Both Intel and NVIDIA work with RISC-V; Intel to help populate its FABs, and NVIDIA as an alternative to ARM that will likely get more focus now that its attempt to buy ARM has fallen through.

One company, Microchip, has gone on record saying it made the move from ARM to RISC-V because it had lower development and licensing costs, better long-term outlook and more flexibility. In short, RISC-V better met their short-term needs, and particularly their low-risk, long-term needs. z