Network-on-a-chip IP company Arteris recently announced it has been acquired by Qualcomm. So that means the end of the Arteris brand and the ability to license the technology, right? Wrong. Interestingly enough, Qualcomm acquired the technology and the engineering team, but is letting Arteris continue licensing the technology to anyone, including Qualcomm’s competition. About a third of the company will continue to work for Arteris, and two-thirds will become Qualcomm employees.


Time will tell if Qualcomm’s competitors continue to adopt the Arteris IP or shift to a new bus fabric. Either way, the deal is good news for the sales, marketing, and support teams at Arteris today, since their jobs would most likely have been in jeopardy at Qualcomm. Theoretically, Arteris could even build up a new engineering team and continue developing its on-chip networking technology. And it’s good news for Qualcomm, who has gained control over the current technology and IP rights for a price that’s likely lower than what it would have paid to absorb the whole company. And it’s good news for Sonics, Arteris’ main competition. Arteris had been trouncing the company on quite a few accounts, but now it can play a powerful new card: “Do you want to rely on IP that’s under your competitor’s control?”

The IP industry continues to evolve quite rapidly. There’s been quite a bit of consolidation, where bigger IP players acquire smaller IP companies, and the EDA companies use acquisitions to turn themselves into IP providers. Another trend is that semiconductor companies sometimes realize they’re developing internal IP they can license on the open market. I’ve seen three different forces at work here:

1. The semis see this as a way to make a few extra bucks, effectively reducing the development cost of the IP.

2. The IP is not really a differentiating technology. In that case, it’s probably best to completely divest it to an EDA or IP licensing company. Remember the NXP IP division sale to Virage Logic, now Synopsys? Another example is Renesas’ recent video coding IP announcement.

3. For programmable processors (CPUs, DSPs, GPUs), licensing provides an opportunity to grow the software ecosystem. The bigger the ecosystem, the higher the value of the processor. Witness MIPS versus ARM. I believe this is the reason NVIDIA licenses its GPU and Intel offered an x86 hard core for licensing.

The Arteris acquisition is an interesting new variant on the acquisition spectrum. Can IP providers remain successful after loosing their independence? Semiconductor companies are licensing in a lot of IP while divesting or licensing out other parts. Can they successfully play a dual role of being licensor and licensee at the same time?

We’re looking forward to see how the market answers these questions.