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Broadcom-ARM licence deal threatens MIPS

Posted: 18 Feb 2011     Print Version  Bookmark and Share

Keywords:Broadcom-ARM licence agreement  ARM Cortex-M0 processor  ARM Cortex-A15 application processor 

Broadcom Corp. and ARM Holdings plc have signed a comprehensive licence agreement that will allow Broadcom to use ARM's wide array of processors ranging from the ARM Cortex-M0 processor to the Cortex-A15 application processor and beyond.

While the deal will allow Broadcom to use current and future ARM processors across its product lines, analysts believe Broadcom's other products, when a processor core is needed, will still use MIPS cores.

As part of this agreement, Broadcom has access to both current and future ARM processors to use across product lines. This includes the Cortex-A15 processor for use in high performance mobile and networking applications, the specialised security hardened SC000 processor core for security applications, and the newly announced Cortex-R5 and Cortex-R7 processors for high-performance real-time applications.

"ARM's wide portfolio of cores enhances Broadcom's strategy of designing cost- optimised high performance solutions for a wide range of applications from Bluetooth headsets to high-end application processors for tablets," said Scott McGregor, president and CEO of Broadcom, in a statement.

''Shares of MIPS are selling off today because ARM Holdings announced a subscription licence agreement with Broadcom,'' said Gary Mobley, an analyst with The Benchmark Company, in a report. ''Because of Broadcom's heavy use of MIPS cores, Broadcom is MIPS' largest customer. We estimate Broadcom's royalties paid to MIPS represent 35 per cent of MIPS' royalty revenue, or 15 per cent of total revenue.''

The news is not all bad for MIPS, however. ''As implied in the trading action for MIPS shares, we believe the market is misinterpreting today's news. In other words, the ARM licence agreement with Broadcom is not necessarily a negative for MIPS,'' he said.

''Broadcom has three main business units, including: 1) Infrastructure, 2) Broadband Communications and 3) Mobile & Wireless. The Infrastructure and Broadband Communications divisions of Broadcom primarily use MIPS cores in SoCs. With the exception of Wi-Fi chips, which use MIPS, Broadcom's Mobile & Wireless products use ARM cores,'' he said.

''We believe Broadcom plans to use both MIPS and ARM cores in the future. As has been the case for years, we expect Broadcom to use ARM cores for mobile application processors, video processors, Bluetooth chips, some embedded Wi-Fi chips, and any chip focused on any mobile product (e.g. cell phones and tablets),'' he said.

''We believe all of Broadcom's other products, when a processor core is needed, will utilise MIPS cores. At Broadcom's recent analyst day, management specifically said that the company will continue to use both MIPS and ARM cores as has been the case for years. Almost exactly four years ago, Broadcom licensed all of MIPS processor cores, similar to the licence agreement signed between ARM and Broadcom announced today,'' he said.

- Mark LaPedus
  EE Times





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