[Flux]

What is cheaper to license? A chip IP or Chip itself?

Does a private company buy an IP or the chip itself?

[silent_guy]

Originally Posted by Flux

What is cheaper to license? A chip IP or Chip itself?

Does a private company buy an IP or the chip itself?

Chip IP. It's a general truism that there is not a lot of money to be made with IP, ARM being the only real exception.

[swaaye]

MIPS too! King of cheap soho network stuff.

[silent_guy]

Originally Posted by swaaye

MIPS too! King of cheap soho network stuff.

MIPS definitely does not cross my mind when thinking of financially successful IP companies. That's the whole problem with chip IP: nobody is willing to pay a whole lot for it. MIPS may have a lot of sockets in networking chips, but that's because they are a bottom feeder below ARM. They don't have a strong negotiation position.

[rpg.314]

Originally Posted by silent_guy

Chip IP. It's a general truism that there is not a lot of money to be made with IP, ARM being the only real exception.

You do not count Imagination in that league? Many of the mods here might not like that, be careful.....

[lanek]

Originally Posted by rpg.314

You do not count Imagination in that league? Many of the mods here might not like that, be careful.....

When looking at the cost of A soc in a mobile, does their gpu is licenced really high? ( a Soc cost what ? 15$ in a mobile price ? ) Still they surely do a good amount of money..

[silent_guy]

Originally Posted by rpg.314

You do not count Imagination in that league? Many of the mods here might not like that, be careful.....

I deliberately stayed away from that, but: no. They're close but not quite there.

They had ~$100M in licensing and royalties for 245M devices. That's $0.4 per chip. For a $15 chip with 50% margin, that's still only 5% of the total cost for often a very large part of the die (see A6).

Last time I checked before today (couple of years ago) they were not profitable, but now, out of a total revenue of £100M, they made £16M in profit before taxation. That's real money, but it's not really earth-shattering for a company of 900, if you consider how many SOCs rely on their IP.

That's the problem of almost all IP: increase your price and your customers will simply do it themselves or switch to another (except for CPUs that really need to be compatible). Think how many of those 245M devices will disappear if Apple decides to do their own GPU...

[lanek]

Dont forget Imagination have been bought by Apple ... (Apple is not really known for give the right price to IP ( basically they even lower the price as low they can ) ... ( this was the real start of the hostility with Samsung, as Samsung have collaborate with them ( Imagination ) for developp the gpu at start and from Scratch for include it in the A1-2-3-4-5 (easy to find in the pressnews room of the society ) ( Apple willing to buy all the company who have start build the hardware for them ( huum i should say who was work with Samsung ).


But this join exactly was i was saying, the gpu cost in a soc, licenced is really low ( enough for generate a good amount of money as we speak about hundred of millions of chip ) but still really low by units. ( on a sold prouct, the licence price is even lower ). But does they have the choice ?

[silent_guy]

Originally Posted by lanek

Dont forget Imagination have been bought by Apple ...

No, they were not. They own 8.5%. Intel owns 12%.

[lanek]

huuum, i need to watch this, i was completely sure Apple have buy the majority of this company .. ( or maybe they was try and my memory have fail somewhere )

[ToTTenTranz]

Originally Posted by lanek

huuum, i need to watch this, i was completely sure Apple have buy the majority of this company .. ( or maybe they was try and my memory have fail somewhere )

Perhaps you mistook it with Intrinsity?



Someone here told me it was more expensive to Qualcomm to purchase a license to make their own ARMv7 chips (like they do with Snapdragon) than it would be to simply purchase the Cortex A8/A9 "blocks" from ARM.

I don't know if it fits the question, though.

[Dominik D]

What does cheaper in this context mean? What does "buying a chip" stand for if you compare it to "licensing IP"? In both cases somebody had to manufacture the chip. In both cases someone had to develop the technology. So if you're comparing "getting off the shelf chip" to "licensing IP" then I guess it's less expensive to license an IP (per chip). But that yields you no hardware you can put in your device - you still have to manufacture that chip you've licensed. So... what are you even trying to ask about?

[iwod]

Originally Posted by lanek

Dont forget Imagination have been bought by Apple ... (Apple is not really known for give the right price to IP ( basically they even lower the price as low they can ) ...

1. Apple did not buy them. As silent_guy has already pointed out.
2. Apple could even be paying higher per SoC then others for other benefits. And Apple simply want PowerVR to succeed.

[sethk]

Originally Posted by iwod

(snip) And Apple simply want PowerVR to succeed.

Why?

[Ailuros]

No idea why the thread has been revived after all this time but I had missed it in the past.

I don't see why Apple would pay more for IMG GPU IP, given also their very high volumes which creates a very important negotiation point for lower rates. As for if Apple would want IMG to succeed or fail, let's just say that Apple obviously would want the licensed IP to fullfill their expectations.

Despite the age of the thread, I also disagree with calculating a persentage of an Apple SoC cost with the average IP royalty IMG gets per chip. An average rate obviously has as well lower and higher rates in order to reach an average in the first place. Obviously higher end and newer IP will cost more than lower end and/or older IP, but that still wouldn't help reaching any viable conclusions since chances to even have an idea what Apple's multi-year/multi-licensing deal with IMG actually contains are close to zero unless someone is a high level Apple or IMG employee.

Finally volumes might continue to increase (they were at 325M devices in their last results) but margins per IP not necessarily since they managed to include also a signficant number of chinese partner deals.