Coup d'état at ARM China?

[gamalot]

This is just a farce that started in June last year ......

[Marco]

Just let NVIDIA buy ARM and let the US government solve this.

If the US government gets serious, even Pooh's ego crumbles (see the Iran sanctions).

[brucehoult]

So, while I agree that customers are also responsible for the situation - not buying the cheap stuff would indeed stop the process, - they didn't create it. Just a thought.

There is nothing intrinsically wrong with "cheap stuff". Often it's perfectly adequate for the job.

There are certain areas in which I buy among the best quality that is available: Toyota and Subaru cars, BMW and Honda motorcycles, E61 coffee machine, Apple phones and tablets. In most other things, whatever is the cheapest on special does the job just fine.

[sleemanj]

Seems like the original article was a bit shoot first ask questions later, see the new article...

https://www.extremetech.com/computing/326617-arm-refutes-accusations-of-ip-theft-by-its-arm-china-subsidiary

The salient points.

There is an ongoing dispute between ARM and ARM China.

But the accusations that ARM China had stolen ARM IP and was relaunching it under its own banner? Those don’t appear to be true.

(...)

This is not theft. It’s no different than the idea of AMD licensing a Cortex CPU from ARM while simultaneously continuing to develop Ryzen. Regardless of the other problems between ARM and ARM China, the IP theft angle is apparently incorrect. Core Power is not a new tech company intended to steal IP, it’s a new brand the ARM subsidiary created to sell its own IP at home. ARM’s business model is designed to encourage this kind of flexibility.

[all_repair]

Seems like the original article was a bit shoot first ask questions later, see the new article...

https://www.extremetech.com/computing/326617-arm-refutes-accusations-of-ip-theft-by-its-arm-china-subsidiary

The salient points.

Does not matter.   The few regulars do not want to read, or choose not to understand.  And with bluesky gone, they can enjoy their "free speech" (cheat shots) with no correction. It has been between well US educated Wu and ARM.  Can happen anywhere in many other forms  if the firing is not done right.  Then we can also have cases like Nissan ex-CEO who is still on the run.

[helius]

Can happen anywhere in many other forms  if the firing is not done.  Then we can also have cases like Nissan ex-CEO who is still on the run.

The persecution of Ghosn is a textbook example of a coup d'etat engineered by corrupt oligarchs and a supine legal system that is wholly owned and operated by them. The same conditions pertain to China, and sadly, many other jurisdictions that conduct political prosecutions.

[Marco]

It has been between well US educated Wu and ARM.  Can happen anywhere in many other forms  if the firing is not done right.

It can happen in many other forms which in no way resemble the scale of government aided theft happening here.

Lets say the ex-Nissan CEO was screwed by the board and a corrupt prosecutor as he alledges (there's also a warrant for his arrest out in France now for seperate charges, so take everything he says with a pinch of salt). At the end of the day the board always has the power to fire him and this would be about the maximum scale collusion could get away with in a civilized country.

Stealing the entire company with collusion from government, only China (and only because it's Japanese owned, if this was an US company it wouldn't be happening).

[Doctorandus_P]

I think the real problem here is that a company like ARM can be "worth" USD32.000.000.000
And for what?
A copyrighted instruction set and a bunch of  VHDL / Verilog?

--------------------------------
At least it's not as bad as the multi billion world of advertisements.
The only goal of advertisements is to tempt you to give money to companies for products you do not want or even need.
And apparently it works, cor else these misleading practices would have ceased long ago.
In the mean time it has become very difficult to find decent products for a fair price, as a lot of them are pushed out of the market and into obscurity by the ridiculous advertisement budgets of big companies.

And don't fool yourself by thinking you can have a good deal when you fall into their greedy trap. Sites like facebook extract about USD50 yearly out of each of their customers, and they get that money from selling your data and advertisements. And the people they get that money from extract that money from you if you bite into their advertisement traps.

[helius]

Advertisements "work" in the sense that they make somebody a lot of money. But if the admen can manipulate consumers into buying certain products, don't you think they can manipulate companies' managers into buying advertising? And of course they do that too. It's turtles all the way down.
Check out the book Influence by Robert Cialdini for insights into why advertising works and what you can do about it.

[Bassman59]

I think the real problem here is that a company like ARM can be "worth" USD32.000.000.000
And for what?
A copyrighted instruction set and a bunch of  VHDL / Verilog?

If you're going to ask that question, why stop there?

Why are Uber and Lyft worth anything? For that matter, why is Airbnb worth anything? These companies have no product to sell. If anything, they are market makers, which is a nice term for "rent seekers."

[SiliconWizard]

I think the real problem here is that a company like ARM can be "worth" USD32.000.000.000
And for what?
A copyrighted instruction set and a bunch of  VHDL / Verilog?

If you're going to ask that question, why stop there?

Why are Uber and Lyft worth anything? For that matter, why is Airbnb worth anything? These companies have no product to sell. If anything, they are market makers, which is a nice term for "rent seekers."

Indeed. Actually, I can't believe how mind-boggling Doctorandus_P 's comment is.

Sure one can always debate the amounts of valuations to no end, but claiming that a company like ARM would have "little value" is, huh.... yeah?

ARM is like... in billions of devices in the world? Has contributed in a major way to the embedded and mobile markets, is almost in everyone's life these days one way or another. You may not like the situation (and it may change over time with RISC-V), but this is just so. How much would you actually value that? In terms of "value", one has to consider how much overall revenue ARM has generated for all companies using their IPs. It's probably a whole lot more than 32 billions.

Uber is a good point. AFAIK, its currently worth more than twice what ARM is. Is that justified? Do you think it's really worth more than ARM?
Funnily enough, Uber probably uses tens of thousands of devices around the world to function, that embed chips with ARM IPs.

[iMo]

FYI - Wave Computing acquired MIPS for $65mil (2018).

[SiliconWizard]

FYI - Wave Computing acquired MIPS for $65mil (2018).

Unfortunately for MIPS, they were sort of dying. Completely different story. Again the value, for this kind of companies, is not in the company's assets, but in the value they have brought, and are likely to bring in the future. MIPS potential for bringing future value was pretty meager.

[brucehoult]

ARM is like... in billions of devices in the world? Has contributed in a major way to the embedded and mobile markets, is almost in everyone's life these days one way or another. You may not like the situation (and it may change over time with RISC-V), but this is just so. How much would you actually value that? In terms of "value", one has to consider how much overall revenue ARM has generated for all companies using their IPs. It's probably a whole lot more than 32 billions.

What they did in the past is not relevant. In theory, the price of a company is the present value of their total future profits.

According to one source I found, ARM had profit of $1.27 billion in 2019 and a loss of $400 million in 2020. Apparently that 2019 figure includes a one-time payment of $1.67 billion for essentially selling their rights in China. So everything else they did may have made a loss in 2019 too. The licensing fees are around $2 billion a year, so the profit depends on their spending.

Even if you assume they will make $1 billion profit every year, that's a lot of years to add up to $32 billion value.

This article is over a year old now, but the points it makes still stand:

https://www.nextplatform.com/2020/07/31/the-dollars-and-sense-of-nvidia-paying-a-fortune-for-arm/

[westfw]

Quote

the real problem here is that a company like ARM can be "worth" ...

Apparently people are happy to "invest" in things with even less "tangible" worth (I'm thinking cyber-currencies, but art would do, too.)

[magic]

The people investing in crypto are anarchists and speculators, both for good reasons

[VooDust]

So, while I agree that customers are also responsible for the situation - not buying the cheap stuff would indeed stop the process, - they didn't create it. Just a thought.

It seems that a good portion of my monthly routine is buying stuff that breaks around the household. Be it toys, tools, clothing, you name it. Everything is made with the intent that consumers can replace it to follow trends. It's so pervasive that I we now expect something to break if it hits the floor. This does not have to be the case.

At my parent's house I can identify tools, cutlery and other stuff that is still good. Hell, sometimes my children are fed from bowls that I was fed from 30 years ago and they're still OK! (I mean the bowls, not the children lol).

Pisses me off so much. That (and other stuff) is why the planet is going to waste.

[brucehoult]

Good quality things are still available if you want them. They just cost a lot more -- like those old things your parents have cost them way back then.

A vacuum cleaner used to be a major investment. You didn't have a choice. Now you can buy one for about the same price as filling your car. Or you can buy a good quality one for a lot more.

[VooDust]

Good quality things are still available if you want them. They just cost a lot more -- like those old things your parents have cost them way back then.

A vacuum cleaner used to be a major investment. You didn't have a choice. Now you can buy one for about the same price as filling your car. Or you can buy a good quality one for a lot more.

I disagree. It's become incredibly hard to identify quality manufacturers. Many near-century old brands have been infested by MBA types and try to milk the good name of the brand with cheaper products.

As a consumer it's almost impossible to look at a piece of material and determine its quality grade. You cannot simply take high price as an indicator for good manufacturing. Some product models are created and marketed towards people who simply enjoy novelty and paying a premium.

[brucehoult]

Good quality things are still available if you want them. They just cost a lot more -- like those old things your parents have cost them way back then.

A vacuum cleaner used to be a major investment. You didn't have a choice. Now you can buy one for about the same price as filling your car. Or you can buy a good quality one for a lot more.

I disagree. It's become incredibly hard to identify quality manufacturers. Many near-century old brands have been infested by MBA types and try to milk the good name of the brand with cheaper products.

As a consumer it's almost impossible to look at a piece of material and determine its quality grade. You cannot simply take high price as an indicator for good manufacturing. Some product models are created and marketed towards people who simply enjoy novelty and paying a premium.

I dunno. I reckon one of these would still be as good as or better than what my mother was using 50 years ago:

https://www.vacuumspot.com.au/nilfisk-gm80b-compact-industrial-vacuum-cleaner-gm80b

In general, if you look for the terms "commercial" or "industrial" you're probably going to get functionality and longevity over gimmicks and looks.

[SiliconWizard]

What they did in the past is not relevant. In theory, the price of a company is the present value of their total future profits.
(... snip ...)
Even if you assume they will make $1 billion profit every year, that's a lot of years to add up to $32 billion value.

This is how you would value a small to mid-size company, or one in a niche market. This definitely isn't how big high tech companies are valued these days.
The value of a company is simply how much any other company is willing to spend on it. And this depends on a number of factors, including how competitive said market is (which implies: how many other companies would be interested in buying), the company's reputation (thus, yes, past and history definitely matter, they have a direct influence on the customer base), and how much value the company directly or indirectly brings to the overall economy. If a company makes $1 billion of revenue a year, but generates "only" $2 billion of revenue for all other companies using their products, it's definitely not the same as if it generates $100 billion of indirect revenue a year.

Again $32 billion may look like a lot, but think of it this way: try and estimate how much revenue all products in the world embedding ARM-based devices generate. This is mind-boggingly high. Now think of the situation if ARM cores suddenly became unavailable. Is there *currently* a viable alternative that would replace them altogether without any negative impact? There isn't. That is what will ultimately define the value. IMHO.

Now whether the acquisition is itself a viable financial operation at this price, this is another question. It's a complex one too: of course, just breaking it even will take a very long time. But OTOH, not buying (and letting a competitor buy) could have a negative impact on market share on a much shorter term... Oh, and also, not that I'm very fond of the situation, but a significant part of all this acquisition money, in such contexts, is kind of "virtual" anyway (well, at least until the company goes bankrupt...)

[Bassman59]

Good quality things are still available if you want them. They just cost a lot more -- like those old things your parents have cost them way back then.

A vacuum cleaner used to be a major investment. You didn't have a choice. Now you can buy one for about the same price as filling your car. Or you can buy a good quality one for a lot more.

I disagree. It's become incredibly hard to identify quality manufacturers. Many near-century old brands have been infested by MBA types and try to milk the good name of the brand with cheaper products.

As a consumer it's almost impossible to look at a piece of material and determine its quality grade. You cannot simply take high price as an indicator for good manufacturing. Some product models are created and marketed towards people who simply enjoy novelty and paying a premium.

I dunno. I reckon one of these would still be as good as or better than what my mother was using 50 years ago:

https://www.vacuumspot.com.au/nilfisk-gm80b-compact-industrial-vacuum-cleaner-gm80b

In general, if you look for the terms "commercial" or "industrial" you're probably going to get functionality and longevity over gimmicks and looks.

In general, when you see the term "pro" (or "professional") you can bet that it's consumer-grade junk.