ARM licensing fee increase could drive some customers to competitors

BY admin July 19, 2020 Technology 1 views

ARM is reportedly looking to milk additional revenue from some of its customers in the form of higher licensing fees.

Recap: SoftBank partially decided to buy ARM to put itself in position to take advantage of the forecasted boom in the Internet of Things. Unfortunately for SoftBank, IoT hasn’t advanced quite as rapidly as some experts anticipated and with the pandemic continuing to play out, it may take even longer for those plans to get back on track.

ARM is reportedly looking to milk additional revenue from some of its customers in the form of higher licensing fees.

Sources familiar with the matter told Reuters that ARM’s sales reps have called for price hikes that could increase the overall licensing fee charged to some clients by a factor of four. Unsurprisingly, the talks have reportedly prompted some licensees to look for more affordable alternatives.

ARM is a semiconductor design firm that licenses its technology out for use by some of the world’s most successful companies including Samsung, Nintendo and Sony. Just last month, Apple announced it would be replacing the Intel processors in upcoming Macs with custom silicon based on ARM’s technology.

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Japanese multinational conglomerate SoftBank purchased ARM for around $31 billion in late 2016. The following year, a 25 percent stake in ARM was moved to the Vision Fund, SoftBank’s venture capital fund that has been hit hard by investments in Uber and WeWork.

Earlier this week, The Wall Street Journal reported that SoftBank was exploring a potential sale or IPO for ARM. Goldman Sachs was brought on to advise the firm, the publication added.

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