Arm Holdings (Arm), a Britain-based semiconductor and software design company, declared on Wednesday, April 29, 2020, that it would lend its chip technologies, which is widely used by smartphone and electronic companies worldwide, to startups for free to encourage them.
Moreover, Arm, owned by a Japanese conglomerate group, Softbank Group Corp. (Softbank), entered a partnership with a California-based small chip manufacturing firm, Silicon Catalyst to support Arm’s endeavor.
Arm’s Free Offerings
Arm primarily lends its intellectual property license to semiconductor designing companies including Qualcomm Inc. (Qualcomm), Apple Inc. (Apple), and Samsung Electronics Co Ltd. (Samsung), which in turn apply the technology in their respective chips for smartphones and other electronic devices. For the use of the technology, Arm charges a range of licensing including fees to be paid during several years of design and development before a company ever sees its first physical chip.
Small companies find it difficult to handle the cost of the use of the technologies supplied by Arm. Considering the challenges, last year, Arm offered about three-quarters of its portfolio of chip technology for a new “flexible access” program that allowed its customers to pay fees only when they had those chips in their hands and proceeded for selling their products.
Currently, Arm is facing growing competition from a rival company, RISC-V, which offers an open-source chip technology with fewer licensing costs. With this new development, Arm announced on Wednesday that it has decided to cancel its annual access fees for startups with less than $5 million in funding. An Arm’s spokesman said the program would cost the company but would help in the long term as smaller chip companies could become familiar with its technology.
Partnership with Silicon Catalyst
Arm also announced on Wednesday that it would start working with Silicon Catalyst, a leading incubator for providing smart solutions of semiconductor start companies, to support small chip firms by extending its offerings for free to Silicon Catalyst.
Earlier, Silicon Catalyst has persuaded the highest-cost suppliers of software and intellectual property to donate their designing chips to its companies to cover millions of dollars of development costs before physical chips were rolled off for a manufacturing line.
Pete Rodriguez, a former NXP Semiconductors executive and Silicon Catalyst’s chief executive, told Reuters that accessing Arm’s intellectual property would help Silicon Catalyst’s portfolio companies to survive long enough to get to the point of manufacturing physical chips, raise additional rounds of funding, and eventually begin paying for Arm’s technology.
Rodriguez stated, “It’s really hard to raise money for hardware – and it’s even harder to do it with just a PowerPoint presentation,” adding that “We don’t give our in-kind partners anything other than a healthy customer.”
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