A battle between two tech giants has been launched, as major IP supplier Arm Holdings is terminating its architectural license agreement with Qualcomm, the world’s top mobile chipmaker. The move may be regarded as a counter measure by Arm to the emerging trend of custom silicon designs, as companies like Apple, Qualcomm and MediaTek take sides.

According to a report by The Register, Arm has been the leading architecture provider for mobile chips since modern smartphones emerged, with its Cortex processors powering nearly every mobile device. However, as Apple and Qualcomm move toward custom silicon designs, Arm’s dominance seems increasingly under pressure.

Qualcomm’s Acquisition of Nuvia Reportedly Sidesteps Royalty Increase

It is worth noting that the recent lawsuit between Arm and Qualcomm may arise from technologies acquired by Qualcomm from Nuvia, a startup founded by former Apple chip engineers, which Qualcomm purchased for USD 1.4 billion in 2021.

According an industry insider familiar with the situation, originally, Arm charged royalties based on chip price, typically around 5% to 7% of the price tag. This structure reportedly applied to customers directly using Arm’s CPU IP or those licensing the instruction set/architecture, with the instruction set licensing generally being slightly lower.

Nevertheless, around two years ago, Arm attempted to significantly increase royalties by implementing a new licensing agreement for its highest-tier mobile CPU IP, changing the structure from 7% to a flat fee of USD 20 per chip, which would be quite a boon for the company, the source explained.

Qualcomm, by acquiring Nuvia, a company focused on Arm server and PC CPUs with an instruction set architecture licensed by the world’s leading semiconductor IP supplier, allows it to leverage this team’s CPU base for high-end mobile applications, therefore sidestepping Arm’s strategy (potentially paying only 5% of the chip price under their agreement), the source noted.

Arm’s Pre-built Cortex Designs Face Challenges from Custom Silicon Designs

To put things in context, Qualcomm’s acquisition of Nuvia indicates its efforts to develop custom Snapdragon cores and reduce dependence on Arm’s pre-built Cortex designs, which is now the main approach adopted by several tech giants.

For instance, according to the report by The Register, the Oryon CPU cores featured in Qualcomm’s latest Snapdragon X Elite are based on Arm’s v8.7-A ISA, which are similar to earlier designs prior to Nuvia’s integration into Qualcomm However, this strategy allows Qualcomm to create cores tailored to its specific requirements, making it capable of competing directly with Apple’s M-series and challenge Intel and AMD in the notebook sector, the report notes.

On the other hand, Apple is leading the way in custom chips, as it has shifted from the traditional licensing model to create proprietary designs. Earlier in May, Apple announced M4, which is built using second-generation 3-nm technology. A report by Wccftech also suggests that the Cupertino tech giant is preparing for the next-gen chipset, M5, which is said to be launched next year.

According to the analysis by The Register, Apple’s strategy for custom silicon stands in contrast to Arm’s, which offers a broad ecosystem based on its Instruction Set Architecture (ISA). In contrast, Apple manages both its hardware and software ecosystems using its signature iEverything approach.

Nevertheless, it would be hasty to underestimate Arm’s impact. The Register highlights that MediaTek recently revealed that it is maintaining the Armv9 architecture for its new Dimensity 9400 chips, indicating that Arm’s Cortex-X4 and A720 cores are still competitive.

Read more

• [News] Arm Holdings Reportedly Cancels Qualcomm Chip Design License
  
• [News] Taiwanese Chipmaker MediaTek Likely to Benefit Most from Arm-Qualcomm Licensing Dispute

(Photo credit: Qualcomm)

According to a report from Bloomberg, a drug company in Mumbai, India, Shreya Life Sciences has engaged in trading chips of advanced technology to Russian, raising concerns among the U.S. and its European allies.

The report indicated that Shreya exported 1,111 units of Dell’s most advanced servers to Russia between April and August of this year. The servers, known as PowerEdge XE9680, feature chips made by NVIDIA or AMD.

The servers, which contain chips made by NVIDIA or AMD, are among the items restricted by the U.S. and the EU. However, the report noted that these shipments are only part of a series of advanced technology exports that Shreya has legally made to Russia since September 2022. The shipments, valued at $300 million, were imported by two Russian trading companies: Main Chain Ltd. and I.S. LLC, as indicated by the report.

According to the report, Shreya’s shipments highlight a loophole in Western governments’ efforts to restrict Russia’s access to dual-use technology with potential military applications. The Bloomberg report noted that India has gradually become the second-largest supplier of restricted technologies to Russia, following China.

Notably, while India serves as an intermediary helping Russia access restricted processors, the actual origin of the shipments may be Malaysia, as the report noted that Indian import data from March to August 2024 shows that 1,407 of the same Dell units were imported into India from Malaysia.

Regarding India’s business relationship with Russia, the report noted that Prime Minister Narendra Modi’s government is not participating in the various rounds of U.S. and EU sanctions against Moscow. In fact, India has been relying on Russia for military equipment.

Additionally, India has become a key buyer of Russian crude oil since European countries halted imports, taking advantage of significant discounts offered by Russia, according to the report.

In response to the report regarding the shipments, Dell stated that it stopped selling its products in Russia in February 2022, right after the full-scale invasion of Ukraine. Both NVIDIA and AMD also emphasized their commitment to full compliance with export controls, according to the report from Bloomberg.

(Photo credit: NVIDIA)

According to a report from TechNews, the AI boom has significantly boosted the share prices of the “Magnificent Seven”—Apple, Microsoft, Google’s parent company Alphabet, Amazon, NVIDIA, Meta, and Tesla—resulting in a total market value exceeding USD 16 trillion.

Alongside this growth, the report highlighted that the salaries of the CEOs of these companies have also risen. Notably, Microsoft CEO Satya Nadella’s compensation increased by over 60%, reaching an annual total of USD 79.1 million (approximately NTD 2.537 billion).

The Magnificent Seven of the U.S. stock market includes tech giants like Microsoft, Apple, Alphabet, Amazon, Meta, NVIDIA, and Tesla. These companies primarily focus on artificial intelligence, cloud computing, online gaming, and software and hardware technologies. With AI driving market growth, their stock prices have consistently hit record highs, pushing their total market value above USD 16 trillion, according to the report.

Citing statisitcs by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the report indicated that Tim Cook, CEO of Apple, ranks first among the CEOs of the Magnificent Seven Stocks. For the fiscal year ending in 2023, Cook’s total compensation amounts to USD 63.2 million, which includes USD 46.9 million in stock awards, USD 10.7 million in non-equity incentive plan compensation, and USD 2.5 million in other compensation, such as security costs and expenses for business and personal travel on private jets.

Microsoft CEO Satya Nadella ranks second with a total compensation of USD 48.5 million for the fiscal year ending in 2023. His compensation is largely tied to Microsoft’s performance. As of December 2023, Nadella owns 800,667 shares of Microsoft Corp. According to the Compensation Committee of the Microsoft Board of Directors, Nadella’s salary is set to reach USD 79.1 million in 2024, reflecting a 63% increase, primarily due to his success in steering Microsoft into the AI sector, as indicated by the report.

The third place goes to NVIDIA CEO Jensen Huang, who received USD 34.2 million in annual compensation, reflecting a 60% increase. This total includes USD 26.7 million in stock awards, USD 4 million in non-equity incentive plan compensation, and USD 2.5 million in other expenses. Thanks to the AI boom, Huang’s net worth has skyrocketed sixfold to USD 125.3 billion in just two years. He has also ranked among the top ten richest people in the world for the first time, as the report pointed out.

The fourth is Meta CEO Mark Zuckerberg. Although his salary is only a symbolic USD 1, he receives USD 24.4 million annually, of which protection fees are as high as USD 23.4 million, including USD 9.4 million in direct security costs, and additional USD 14 million to “cover additional expenses related to the personal safety of Mr. Zuckerberg and his family.”

Fifth is Sundar Pichai, CEO of Alphabet, Google’s parent company, who receives USD 8.8 million annually. This includes a salary of USD 2 million and approximately USD 6.77 million for personal security. However, following several major layoffs at Google, Pichai’s salary has drawn criticism from employees worldwide, making it a controversial topic, as the report pointd out.

The sixth place goes to Amazon CEO Andy Jassy, who receives an annual compensation of USD 1.3 million. This includes a salary of USD 365,000 and a security fee of USD 992,764. When the value of vested shares is included, Jassy’s total compensation for 2023 amounts to approximately USD 29.2 million, as the report mentioned.

The seventh is Tesla CEO Elon Musk. Initially, his extraordinarily high salary of USD 56 billion for 2023 was not approved, resulting in the American Federation of Labor and Congress of Industrial Organizations reporting it as 0. However, during Tesla’s shareholders’ meeting on June 13, a new 10-year compensation package worth USD 44.9 billion was approved.

(Photo credit: NVIDIA)

Intel announced today an expansion of its packaging and testing facility in Chengdu, China. In addition to packaging and testing for client products, the facility will now offer services for server chips and will establish a Customer Solutions Center aimed at boosting local supply chain efficiency, enhancing support for Chinese clients, and improving response times. Planning and construction for these enhancements are already underway.

Under Intel’s expansion plan for the Chengdu base, the added capacity will primarily focus on packaging and testing services for server chips to meet Chinese clients’ demands for high-efficiency, customized packaging solutions.

The soon-to-be-launched Intel Customer Solutions Center is designed as a one-stop platform to support enterprise digital transformation, offering industry clients tailored solutions based on Intel’s architecture and products.

The Santa Clara, California-based company is set to invest $300 million into its local entity, Intel Products (Chengdu), to support its expansion efforts, according to a WeChat post from the city’s Reform and Development Commission, as reported by the South China Morning Post.

According to Intel’s public information, the Chengdu packaging and testing base is one of the company’s largest globally. ESM China reports that the facility has become one of Intel’s three major wafer preprocessing sites worldwide, supplying half of Intel’s mobile device microprocessors.

Located in Chengdu’s High-Tech Comprehensive Bonded Zone, Intel’s packaging and testing facility began its journey in August 2003 when the company announced plans to build a semiconductor packaging and testing factory in the city’s High-Tech West Zone. Construction of the first phase started in February 2004, and by late 2005, the facility was operational, with products exported worldwide. The second phase broke ground in August 2005, and by October 2006, construction was completed, including the training center, while the microprocessor facility began production in 2007, packaging Intel’s most advanced multi-core microprocessors.

(Photo credit: Intel)

According to a report from Silicon Angle, four former Intel directors have published an article in Fortune, urging the company to spin off its fab business.

The authors include Reed Hundt, a onetime Federal Commission Communications chair, Charlene Barshefsky, former U.S. Trade Representative, James Plummer, Stanford University’s dean of engineering for over a decade, and David Yoffie, a Harvard Business School professor and longtime Intel director.

Their argument basically are based on two reasons. First, they argue that if Intel is going to be acquired by other companies, the potential buyers would likely prioritize cost-cutting and see little value in the money-losing manufacturing fab. They highlight this possibility due to Intel’s recent significant drop in stock price, and with its fab business operating at a substantial loss, it could become a target for cost-cutting initiatives.

Secondly, according to their article in Fortune, they noted that since Intel operates its own foundry within its corporate structure, it struggles to attract business, as other chip design companies see it as a potential competitor.

In their article in Fortune, they pointed out that Nvidia, Qualcomm, Broadcom, and others are all looking for a second manufacturing option other than TSMC, but will continue to be cautious about Intel as long as it remains a direct competitor. They indicate that spinning off the fab business would alleviate these concerns.

They argue that while the U.S. government has already promised up to USD 8.5 billion in grants and USD 11.5 billion in low-cost loans for Intel, the government should further demand Intel to split its design and manufacturing operations into two completely independent companies.

On the other hand, Intel’s former CEO Craig Barrett has a different perspective on whether Intel should split its foundry business. In an article published in Fortune, Barrett argues that separating Intel into two distinct companies is not the answer. He pointed out that this approach would hinder the foundry business’s ability to keep pace with the latest technology, leaving the U.S. government dependent on foreign suppliers like TSMC for cutting-edge advancements.

Previously on September 16th, Intel announced that it will transform its foundry business into a wholly-owned subsidiary with its own board of directors. According to its press release, this new structure will provide greater separation and independence for Intel’s external foundry customers and suppliers from Intel’s other divisions. Importantly, it also gives the company the flexibility to evaluate independent funding sources in the future and optimize the capital structure of each business to maximize growth and create shareholder value.

Read more

• [News] Intel’s Foundry Spin-off Could Improve Chances of Securing Orders from Tech Giants such as Apple and AMD
• [News] Intel Reportedly Aims to Raise Billions through Sale of Minority Stake in Altera

(Photo credit: Intel)