By Stephen Nellis
(Reuters) - Arm Inc, the British firm whose chip technologies power most smart phones, said on Wednesday it was easing fees for startup companies and providing free offerings to an incubator for early-stage chip firms.
Arm, owned by Japan’s Softbank (OTC:SFTBY) Group Corp, licenses its intellectual property to companies like Qualcomm (NASDAQ:QCOM) Inc, Apple Inc (NASDAQ:AAPL) and Samsung Electronics (OTC:SSNLF) Co Ltd, which in turn use the technology in their respective chips for smartphones and other devices. Arm charges a range of licensing fees to access its technology, including some that must be paid for potentially several years of design and development time before a company ever sees its first physical chip.
Those costs are more difficult for small companies to absorb, so last year Arm opened up about three-quarters of its portfolio of chip technology for a new "flexible access" program that delayed many of those fees until after its customers had a chip in hand that they could begin to sell. Arm also faces competition from RISC-V, an open-source chip technology with fewer licensing costs.
On Wednesday, Arm extended that effort, saying it would eliminate its annual access fees for startups with less than $5 million in funding.
An Arm spokesman said the program will carry some costs to Arm, but the company views it as a long-term investment to ensure smaller chip companies can become familiar with its technology.
Arm also on Wednesday joined Silicon Catalyst, a California-based firm that provides support to small chip firms, as an "in-kind partner" by providing some of its offerings for free to the firm's portfolio companies.
Silicon Catalyst has persuaded many of the highest-cost suppliers of software and intellectual property for designing chips to donate to its companies to defray millions of dollars of development costs before physical chips roll off a manufacturing line.
Pete Rodriguez, a former NXP Semiconductors (NASDAQ:NXPI) executive who is now Silicon Catalyst's chief executive, told Reuters that having free access to some of Arm's intellectual property will help the firm's portfolio companies survive long enough to get to the point of manufacturing physical chips, raise additional rounds of funding and eventually begin paying for Arm's technology.
"It’s really hard to raise money for hardware – and it’s even harder to do it with just a PowerPoint presentation,” Rodriguez said. "We don't give our in-kind partners anything other than a healthy customer."