Arm Holdings Ltd. is finally going public again as soon as next month, but the chip designer owned by SoftBank Group Corp. just raised the specter of a big potential threat.
The company, which filed paperwork for an initial public offering late Monday, develops chip designs known as RISC (reduced instruction set computing) processors — but there is a rival, open-source architecture group, called the RISC-V Foundation, which threatens Arm’s licensing business model.
Arm acknowledges as much in the “risk factors” section of its prospectus. “If RISC-V-related technology continues to be developed and market support for RISC-V increases, our customers may choose to utilize this free, open-source architecture instead of our products,” Arm said in its regulatory filing.
Earlier this month, Arm customer Qualcomm Inc.
QCOM,
which licenses Arm designs for chips such as its Snapdragon processor, joined four other semiconductor companies in supporting RISC-V. Qualcomm and the others will invest in a company focused on accelerating the adoption of and developing commercial products based on RISC-V
This alliance, which includes Infineon Technologies
IFXA,
NXP Semiconductors
NXPI,
Robert Bosch and Nordic Semiconductor
NOD,
was also referenced by Arm in its F-1 filing.
Qualcomm Chief Financial Officer Akash Palkhiwala was asked about RISC-V at a recent JPMorgan tech conference
“Over time, there is maybe an opportunity for RISC-V cores to be used very broadly in phones,” Palkhiwala said. “We already today use RISC-V in phones, not in the main CPU, but in cores that go into our audio, video, other technology engines. RISC-V is already being used, and so in the future, you can see an opportunity for RISC-V to have broader usage in phones.”
Qualcomm, which represented 11% of Arm’s revenue in fiscal 2023, is currently involved in a legal dispute with Arm.
In addition, a few AI chip startups are also focusing on RISC-V architecture to develop chips. These include Tenstorrent, a computing and chip startup founded by Jim Keller, one of the leading processor engineers in the semiconductor industry known for his work at DEC, Advanced Micro Devices Inc.
AMD,
and Apple Inc.
AAPL,
With many companies looking to develop chips internally, especially for their own data centers running AI, it’s feasible that RISC-V could make inroads in that arena as well. But Arm is also targeting that market, noting that each generation of its processors is designed to accelerate key parts of algorithms that will be used in future AI applications.
U.K.-based Arm is expected to jolt the lackluster IPO market when SoftBank
9984,
sends it off on its own as a public company, but investors captivated by the prospect of a flashy, AI-themed offering should be forewarned about competition in Arm’s path.
Read the full article here
