Arm Competing With Its Customers

One of the oldest rules of the semiconductor industry is: Don’t compete against your customers.

This is all the more important if you’re an IP company where your toe-hold in a customer’s product plans can often be replaced pretty easily.

One of Arm’s great strengths was that its first two CEOs were trusted by its customers not to give preferential treatment to any other customer and not to compete with its customers.

At the time of Arm’s takeover by Softbank, Dan Risdale of Edison warned:  “One of the key factors behind Arm’s rise is that it has carefully avoided stepping on its customers’ toes.” 

Risdale added that the move to double headcount “may flag the shift to a more aggressive approach to expanding its portfolio of intellectual property. However, this could put the company into increasing competition with its chipmaker customers and increase their resistance to licensing more IP from a dominant player.”

Under Arm’s present CEO, it  is not clear whether Arm’s strategy is dictated from Cambridge or Tokyo, but Softbank’s CEO is very vocal about his ambitions in IoT and sees Arm as the vehicle for realising them.

And Arm’s acquisitions  of Stream and Treasure Data are moves up the IoT value chain.

This is causing, to put it mildly, a frisson of concern among Arm customers.

For instance Silicon Labs is making a strong play in IoT and is an Arm customer using Arm cores in its IoT processors which are called Gecko.

“We are investigating RISC-V and considering whether we would move some of our investments over,” Silicon Labs CEO Tyson Tuttle told me, adding, “our second generation Geckos have four or five processor cores.”

Could you mix RISC-V and ARM cores on the same Gecko?” I asked him.

“We’ve already done that,” replied Tuttle, “all of our code will run on a RISC-V processor.”

Had the change in ownership at Arm bothered him?

“No,” he replied, “but when you’re an IP provider you should worry whether you’re competing with customers. Arm has to be careful.”