Supply chain
Support for startups: Q&A with Arm Taiwan president CK Tseng
Monica Chen, Hsinchu; Joseph Tsai, DIGITIMES

Following the release of Flexible Access in 2019, Arm, a subsidiary of SoftBank, is opening up the project to startups with no charge, helping newcomers to reduce costs for product developments. Arm will only begin charging licensing fees from these companies until they begin selling products to make income.

To understand more about the project as well as Arm's strategies and planning for 2020, Digitimes recently talked to CK Tseng, president of Arm Taiwan.

Q: What's Arm's assessment of the handset market in 2020?

A: Arm's IPs and architectures belong to the very top of the upstream supply chain. Arm's incomes from royalties are actually not able to represent the current market status since Arm usually does not collect royalties until after client' begin shipments.

Compared to wafer foundries that are able to judge the market's status by their orders, the numbers that Arm has are already rather late.

Q: How does Arm see 5G developments this year?

A: Judging from its recovery at the moment, the Chinese market will require around three months to get its pace back in 5G deployment. But Europe and North America are currently still being seriously impacted by the coronavirus pandemic and their progresses are difficult to assess.

Overall, the worldwide 5G deployment is being undermined by the pandemic, but it remains to be seen how much longer the pandemic will be delaying the 5G development.

Q: Will the delay in 5G deployments affect AIoT developments?

A: Handsets have seen a dramatic deceleration in shipment growth. As handsets have become a necessary device in our lives, enterprises have been pushing to develop technologies to improve user experience and this trend can be seen from the rising handset pricing.

Delays in 5G deployments are unlikely to have a major impact on IoT applications' development, as the next 10 years will be the golden era where key technologies will emerge. With new 5G and AIoT technologies as well as new interfaces, more emerging applications are expected to appear, and there will be more startups woking to satisfy the market's demand.

Q: What is Arm's strategy against the deceleration in handset shipment growth?

A: Arm has been transforming its businesses in line with changes in demand, but the transformation has been more about technology than business models. However, the company's first business model transformation happened at the end of 2015 when Arm released the fast-track license for the Cortex-M0, allowing its partners to make payment online and download the IP.

In 2019, Arm released Flexible Access, allowing developers to access 75% of the company's technological resources including IP, software and technical support. At the end of April 2020, Arm launched Flexible Access for Startups to offer the entrepreneurs critical resources for their tech developments.

Flexible Access for Startups allows new companies to gain access to the same 75% of technological resources from Arm without needing to pre-pay license fees.

Q: How does Arm profit from Flexible Access for Startups?

A: Unlike our traditional licensing system, Arm will not charge any fee for the use of its technological resources before startups are able to begin tape out. Startups may make changes to the product design during the phases from building up prototypes to pilot production, and may shift to other IP architectures to perfect the design. Arm does not begin charging licensing fees from these companies until they are able to generate sales.

Flexible Access for Startups has already been activated for a couple of months and attracted several startups to sign up.

Q: Does Arm provide any consulting services to the startups?

A: Flexible Access for Startups' supporting services are based on clients' needs. Some clients know what solutions they need, while some need advices and analyses from Arm in order to decide the directions for their product designs, technology development, marketing and operation.

The solution is offered with the same pricing worldwide.

Q: What advantages does the Arm architecture have against x86 and RISC-V?

A: Arm is a technology provider and not an end product manufacturer. Such a role gives it a broader perspective, allowing it to develop technologies that support entire systems, accelerating the time-to-market for products and helping establish comprehensive ecosystems.

Clients are able to use Arm's resources while conducting R&D, design and manufacturing to shorten time-to-market and reduce costs.

Q: How will Arm promote the Flexible Access for Startups? Is Arm providing any other assistance to startups?

A: The Flexible Access for Startups program does as much as it can to help startups materialize their ideas. Since startups usually have difficulty finding the right entry point to the ecosystem, Arm will not rule out the possibility of connecting them to others in the ecosystem.

Although Arm has eliminated the pre-production licensing fees for startups, these newly formed companies may still go bankrupt before they get to the point of selling their products. Arm hopes more partners in the industry can extend help to these startups.

Q: Is Arm's operation being affected by the coronavirus pandemic?

A: The pandemic has a major impact on the IT market. Asia had the worst impact in the first quarter, and Europe and North America in the second. End-market demand for IT products is also seeing changes and affecting both the upstream and downstream in the supply chains.

When the pandemic is contained, demand will also start to reappear. China, for example, has seen a fast recovery after the outbreak there was put under control, and it is accelerating the establishment of its 5G infrastructure. If Europe and America do not see a second or third wave of the pandemic, they should also see a fast return of demand for end products.

Applications such as those for remote study and work have also become new business opportunities for sectors such as systems, network communication, devices and cloud computing platform.

Arm Taiwan president CK Tseng

Arm Taiwan president CK Tseng
Photo: Monica Chen, Digitimes, July 2020

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