ARM has signed ten licences for physical IP optimised for use with processors – four of them in the last quarter, Q409.
ARM calls these deals POPS (processor optimisation packages). Their purpose is to enable the licensee to more readily achieve a high-performance, low-power processor implementation through specially optimised physical IP technology.
For every chip implemented using a POP, ARM receives a royalty both for the processor in the chip and for the physical IP.
In Q409, four POPS licenses were signed for two different advanced ARM Cortex-A cores at 32nm and 40nm nodes, for use in digital TV, gaming, mobile computing and smartphone applications.
ARM’s physical IP royalties in general reached a high in Q4 of $11.6m, up 12% year-on-year.
Physical IP royalties are generated mainly from chip wafers manufactured in foundries such as GloFo, TSMC and UMC.
When ARM acquired its physical IP technology in 2004 by buying Artisan for a purchase price, net of cash and cash equivalents, of $700m, it was thought ARM had paid a very full price.
However the tie-in with the foundry industry and the increasing requirement for POPS suggests that the acquisition bought ARM a long-term growth strategy.