Is ARM Raising Prices For Chip Licences?

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ARM is reportedly seeking to raise licensing prices for some customers, leading some customers to consider ARM alternatives

British chip designer ARM Holdings is reportedly seeking to raise licensing fees for some customers.

According to Reuters, which cited four people familiar with the matter as its source, in recent negotiations with customers ARM has looking to raise licensing fees.

ARM is still based in the Cambridge, England after it was acquired by Japanese giant Softbank in 2016 for $32 billion. Its chip designs are used in most mobile processors around the world, but its chip designs are also found in data centres, IoT, self-driving cars, and server rooms.

Price rise

But now in recent talks, ARM’s sales representatives have reportedly pressed for price hikes that would boost overall license costs for some customers by as much as four times, two people familiar with the matter told Reuters.

These licence fee prices rises have reportedly prompted some licensees to consider non-ARM alternatives, two of the people told Reuters.

“It’s created a lot of tension for us,” one ARM licensee told Reuters, stating the hikes seemed out of proportion to the improvements in the technology.

ARM told Reuters it does not comment on pricing negotiations.

It is understood that ARM last year began a “flexible access” program to give customers access to a broad range of its technology with lower upfront costs.

For sale?

As mentioned above, ARM is owned bySoftBank, and Reuters cited a Wall Street Journal report this week that suggested tat SoftBank had hired Goldman Sachs Group to explore alternatives to a re-listing of the company by 2023.

The alternatives could include a full or partial sale of Arm

SoftBank Chief Operating Officer Marcelo Claure told the Financial Times on Tuesday ARM would go public when SoftBank has realised “most of the value” from the chip firm, but said “I don’t see ARM as a public company in the next 12 months.”

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Author: Tom Jowitt
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