The current licensing policy from ARM dictates that it charges a royalty based on the chip’s average selling price and licensing fee from manufacturers such as Qualcomm and MediaTek for using its CPU designs. However, going forward, there will be a small but very impactful change in the way ARM does business, and it might negatively affect the rumored partnership of MediaTek and NVIDIA, who were previously reported to have joined forces in making a chipset flaunting a new GPU.
If ARM grants a Cortex CPU license, the existing partner cannot use their own GPU, ISP, NPU, and modem
A new image from the Financial Times mentions ARM's current and future licensing policies, with Twitter user @korean_riceball having uploaded an image revealing how the British chip designer will make money moving forward. Instead of simply charging a licensing fee and royalty payments from companies like Qualcomm and MediaTek, ARM has added another condition to the mix; such entities cannot use their own GPU, NPU, modem, or ISP if granted a Cortex design.
For years now, we have seen companies like Apple not only use their own CPU designs, but custom GPUs, so does ARM’s latest licensing policy dictate that technology giants will not be able to use custom designs? No, because according to the image, firms like Apple and Samsung are unaffected by this decision because they have their own agreements with ARM, meaning that they are free to use their own ISP, GPU, NPU, modem, and other custom chips. Unfortunately, the same cannot be said about other companies.
figure below shows " a schematic diagram of the Arm's new licence policy
if you receive an Arm Cortex CPU license, you cannot use your own GPU, NPU, ISP, modem, etc. at all (?!) pic.twitter.com/j4XDcTxhjA
— Riceball
(@korean_riceball) May 22, 2023
Another Twitter user @RGcloudS has compiled a long thread talking about the implications of this new licensing policy. He believes that alongside the MediaTek and NVIDIA partnership, these new changes also threaten Qualcomm’s pursuit of launching a Snapdragon SoC with custom Oryon cores that will be made possible with its Nuvia acquisition. The tipster mentions that in order to avoid this, companies like Qualcomm and MediaTek need to register themselves as device manufacturers and set up their own factories.
However, ARM knows this will be risky for both SoC makers and believes that such companies will not proceed with this decision, leaving them to accept the new changes. There is no word if Qualcomm will be struck with a lawsuit soon from ARM in light of this policy shift, but we will wait for more details to pour through and update our readers accordingly.
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