Shulou(Shulou.com)11/24 Report--

"come on, Pentium computers and let them think instead of me."

When Park Shu sang the lyrics in "New Boy" in 1999, the x86 architecture chip was undergoing a magnificent transformation. With the combination of Wintel, personal computers have now flown into the homes of ordinary people; in 2021, when the "landlord's cat" band covered the song, the computer was no longer the main window for people to get a glimpse of the world, and the x86 architecture also encountered a fateful rival: Arm.

CPU is the most important digital chip. In the past decade, CPU based on Arm (Advanced RISC Machine) architecture has swept the smartphone market, eroded the traditional desktop computer market, and is increasingly pressing in the server computer market. Today, the potential of the Arm instruction set in the chip localization movement has also attracted a large amount of capital, making this round of semiconductor feast have the potential of cooking oil.

X86 and Arm, as the indispensable brain of all modern computing systems, today's single CPU can have multiple processing cores and tens of billions of transistors, the best workload type is serial computing, and its strong versatility can also direct the overall operation, control and deploy all computer hardware resources, interpret computer instructions and process data in computer software [1]. Therefore, it can cope with everything from system startup and productivity applications to advanced workloads such as cryptography and artificial intelligence. [2]

CPU is divided into different schools depending on the instruction set (also known as architecture or ISA). The so-called instruction set refers to a set of standard specifications for hardware and software. CPU chips and software applications will be designed around this set of specifications, which can be understood as hardware programs to guide and optimize CPU operations. Instruction set is generally divided into two architectures: complex instruction set CISC (Complex Instruction Set Computer) and reduced instruction set RISC (Reduced Instruction Set Computer).

The beginning of the instruction set is Intel. Since Intel launched the first commercial microprocessor 4004 fully integrated into a single chip in 1971, CPU and instruction sets have been developed for nearly 50 years.

▲ CPU has gone through four stages in its 50-year history, watchmaking (fruit shell hard technology).

Source: CSTC [3]

Over the past 50 years, many sets of instructions have emerged, but some participants have gradually faded out of the market or just emerged from the market, unable to shoulder the heavy responsibility. Desktop, mobile and server require high CPU performance. At present, the x86 instruction set represented by Intel and AMD (Superway Semiconductor) accounts for the majority of the market, while the Arm instruction set accounts for a small share.

Note: the origin of x86-because early Intel processors ended with 86, including Intel 8086, 80186, 80286, 80386 and 80486, it was called x86.

▲ market mainstream instruction set, tabulation (fruit shell hard technology)

Domestic CPU relies on imports, and servers have the greatest demand for CPU performance and quantity, among which Intel and AMD account for more than 94% of Chinese server CPU shipments in 2021.

▲ 2021 China Server CPU Market Shipping situation, Tu Yuan Hua an Securities [4]

At the beginning of the birth of the promising Arm, Arm was only used in mobile phones, and then occupied the embedded and automotive fields with the advantage of low power consumption. Today, the cumulative shipment of ubiquitous Arm chips has exceeded 225 billion [5].

In recent years, Arm, which was originally active in mobile devices (mobile / tablet / wearable) and embedded field, has entered into desktop, mobile and server CPU in large numbers. The makers behind the growing winds are Apple and Amazon.

The ecosystem of ▲ Arm architecture is becoming larger and larger. Pacific Securities [6]

Apple has the ability to lead the industry, changing the instruction set several times, subverting the desktop and mobile PC market.

In 1994, Apple transferred Mac from Motorola 68000 to PowerPC,PowerPC, which is an instruction set created by Apple, IBM and Motorola. During a period of time, PowerPC has achieved great success, such as Sony's PlayStation3, Nintendo's Wii and Wii U, Microsoft's Xbox 360 are all equipped with PowerPC processors; [7]

In 2005, when Apple switched to Intel's x86 processors, Jobs, hoping to compete with other computer OEM makers for more markets, used the same instruction set as his rivals, allowing users to install rival operating systems. Of course, if he didn't approve x86, Jobs wouldn't choose it. [8]

In 2020, the wind changed again. Apple abandoned x86 to use self-developed Arm SoC (including CPU, GPU, ISP, NPU, etc.). For a time, the industry and the media thought that Apple might lead the trend of the new decade. [9]

Since Apple abandoned x86 and launched M1, it has brought the Arm to unboiled water, and the whole market is also full of gunpowder, making x86 "disgusting". Geekbench 5 test scores show that the 2020 13-inch MacBook Pro (M1x 3.2 GHz) is 70% faster than the 2019 15-inch MacBook Pro (i7-9750H@2.6 GHz) single core and 50% faster, and M1 has only 8 threads, and i7-9750H is 12 threads [10]. Similarly, the PassMark benchmark test shows that the single-core performance of M1 chips even surpasses some 11-generation Core i9 (i9-11900K, i9-11900F, etc.) and 12-generation Core (i7-12700T, i5-12500T, etc.). [11]

There are also some different test results. The Cinebench R23 test shows that the single-core performance of Intel CPU is better than M1, but the multi-core performance is still lower than M1 [12]. Intel also rushed to share a set of data after the launch of the M1 product, proving that its product had a greater advantage (i7-1185G7), but it didn't make a stir at the time. [13]

Since then, the momentum of Apple's launch of M1 Pro, M1 Max and M1 Ultra,Arm chips has become increasingly fierce.

During the 2022 WWDC, Apple launched the M2 chip, which uses TSMC's second-generation 5nm process and integrates more than 20 billion transistors, which increases the CPU speed by 18% compared with M1. The key to Apple's smooth design and production of such a chip is Arm. [14]

Although there are more and more criticisms of Apple hype in the industry, and although Apple data is indeed suspected of exaggeration, I have to say that the real effect of Apple chip is relatively good, which confirms the ability of Arm to PC on desktop and mobile.

As an out-and-out Arm pie, Amazon (AMZN) pushes Arm chips in the server field. The Arm-based AWS (Amazon Web Services) Graviton cloud processor has been launched for the first time since 2018, demonstrating the advantages of Arm IP to the cloud computing market.

In addition, Google, Microsoft and other big companies have also developed their own Arm cloud processors.

Ampere (an Sheng Pei), a company that specializes in Arm architecture server CPU, once told me that x86 has been launched for a long time and has been used in the market for decades, and its original design intention and application scenario are non-cloud business, which is also the biggest disadvantage of x86. In the past 10 or 20 years, x86 will also be used in cloud business because there is no better choice in the market, and Arm will play a more and more important role in the data center in the future.

The "higher and higher" status of Arm is reflected in all kinds of CPU fields, which is also the logic behind the large-scale entry of domestic forces into the Arm market.

Followed by all kinds of capital into the bureau, the domestic Arm architecture CPU company ushered in an era full of money.

Domestic Arm architecture CPU financing tide for many years, China's market CPU are dependent on imports, not only Trojans, loopholes, back doors and other security risks, but also may be monitored and controlled. After the "Stuxnet", "Prism Gate" and various sanctions events, there is only one way for domestic CPU to develop independently and controllably. [15]

But as the "pinnacle of artifacts", it is difficult to build CPU. A successful CPU not only requires high investment, but also involves a whole chain: on the one hand, high-performance CPU is a typical talent, capital and technology-intensive industry; on the other hand, making a chip does not mean the end, but also to build a complete industrial ecology, a chip without hardware and software, it is useless.

If you want to build a CPU, you must first have an instruction set. There are three ways for domestic manufacturers:

Obtaining IP (intellectual property) kernel authorization: it is equivalent to buying the circuit or physical layout that has been designed. Based on the semi-finished product and then the back-end design, the entry barrier is low and the performance is guaranteed. But the hard core IP needs to use the specified foundry and process, while the soft core IP does not allow any design changes except for configuration options. More importantly, neither of these IP has independent controllability; [16]

Obtain instruction set authorization or use open source instruction set: only buy instruction set license, and then independently design the corresponding specification CPU. In this mode, there is only a piece of authorization, and the design of CPU depends on itself, so it has a certain degree of autonomy and controllability, but the instruction set itself also has the risk of sanction; or use RISC-V, an open source instruction set, to design CPU independently with high controllability, but if you need to use some patent modules, it will also involve authorization.

Independent R & D instruction set: new instruction set that does not exist in the world, does not rely on any other instruction set, the technical threshold is extremely high, but highly autonomous and controllable. There are also some cases of semi-independent research and development in China, which independently develop new instruction sets on the basis of authorized instruction sets.

Through these three ways, the domestic CPU market has formed three major instruction set camps: x86, Arm and self-research:

In terms of x86, the IP licenses of Tianjin Haiguang and Shanghai Mega Core come from AMD (Ultra Micro Semiconductor) and VIA (via Semiconductor) respectively, with high performance, good compatibility and ecological integrity, but there are doubts about self-control.

In terms of Arm, Kunpeng and Feiteng are all authorized by the instruction set, which has a certain degree of autonomy and controllability, compatibility and ecological dependence on the Arm instruction set itself.

In terms of self-research, Godson was previously based on MIPS authorization for self-research, then abandoned MIPS, completely independent research and development, Shenwei is based on Alpha authorization for self-research, independent controllability is very high, but there is a gap between performance and foreign countries, compatibility and ecology need to be further built.

▲ domestic major CPU manufacturers, tabulation (fruit shell hard technology)

CPU as an infrastructure, there must be new players, there is no shortage of capital.

Building CPU costs money, and the amount of corporate financing related to CPU continues to rise. Some companies can get hundreds of millions of yuan of financing in the Pre-A round, with a valuation of more than 4 billion yuan.

In this upsurge, although some manufacturers will choose open source RISC-V to design CPU with strong independent control, most manufacturers will still choose the more mature Arm to produce high-performance CPU.

The situation of domestic enterprises in the main financing stage of ▲, tabulation (fruit shell hard technology)

The cold thinking behind the financing tide, so what challenges will domestic companies face when they enter Arm high-performance CPU on a large scale?

X86 will still dominate the market. Arm has a lot of momentum, but x86 still won't hand over the scepter. In practical application, both parties win or lose each other, which is due to the different mechanisms and product characteristics of x86 and Arm when designing CPU:

The generally accepted conclusion in the industry is that x86 is based on complex instruction set (CISC), instructions are processed in multiple clock cycles, and Arm is based on reduced instruction set (RISC), which executes one instruction per clock cycle, so Arm is better in power consumption, but Arm is weaker than x86 in terms of performance.

X86 does more work in hardware, while Arm leaves part of the work to the compiler, thus reducing hardware complexity. [17]

As the Arm instruction set of RISC, the number of instructions per cycle (IPC) can be used to measure the running speed of CPU, but the x86 instruction set of CISC is not suitable to reflect the running speed with IPC, because an instruction in x86 architecture requires CPU to perform a lot of work, while an instruction in Arm usually corresponds to only one function or operation. [18]

X86 instruction set has been developed for a long time, and the ecology of PC is obviously more mature than that of Arm. Before, it was deeply bound with Windows and was jokingly called Wintel (Windows+Intel). At present, Arm supports more and more operating systems, languages, cloud natives, databases, CI (continuous integration) / CD (continuous deployment), but the ecology is still not as good as x86.

Arm instruction set has been operated in authorization mode since its birth. Arm itself does not rely on its own design, manufacture or sale of CPU chips. because of open license, it is more active in development, but x86 instruction set is almost closed, only for very small companies. Only in February this year, the soft core and hard core authorization of x86 instruction set began to be loosened. Enables customers to mix different CPU IP cores such as x86, Arm and RISC-V in custom design chips made by Intel. [19]

Some experts have also warned the industry that there is no point in arguing about instruction sets. This is because the technical techniques related to CPU performance improvements are completely independent of the instruction set, including pipelining, out-of-order execution, branch predictors, multi-level caching, and many other techniques that can be implemented in any instruction set such as x86, Arm, RISC-V, and so on. Arm and x86 are only one language to communicate with CPU, and the final performance depends on the chip design. [20]

To put it simply, the instruction set is a hammer, and it depends on the user what the chip can be hammered. Even if you have a mature set of Arm instructions, how far domestic manufacturers can go depends on the ability of CPU design.

In addition, although Arm has made great progress in high-performance CPU, and there are giants standing in a strong team, it has to be said that x86 still has absolute advantages in performance and ecology, and it is difficult to eat x86 market share in the short term.

Arm has great potential, but it still takes time to develop.

In 2020, x86 accounted for nearly 98% of the CPU market. According to Tom's Hardware, Q2 Arm CPU accounted for less than 2% of the total market share in 2020, while Q1 Arm CPU accounted for 11.3% in 2022. [21]

According to Khaveen Investments, the Arm CPU market will reach $16.92 billion TAM (accessible market) in 2025, increasing its share of the total market to 19.5%. [22]

▲ 2020 Q2-2022 Q1 Arm CPU market share change, figure source: Tom's Hardware [21]

The authorization fee for Arm is very high, and the amount of money spent on building CPU is very large, especially for enterprises like Arm, which specializes in authorization for a living, the authorization fee is very high. The fee items of Arm include prior authorization fee (License), royalty (Royalty) and technical consulting service fee. [23]

The prior authorization fee is a fixed fee charged by Arm. The authorization mode is divided into three types: instruction set authorization (Architecture License), traditional IP authorization (Traditional IP Licensing) and flexible authorization (Arm Flexible Access).

Nowadays, the authorization fee of the middle and low end Arm chip is low, but the desktop end, mobile end and server CPU with high performance requirements belong to the cutting-edge field, and the license fee is high. Pre-license fees are estimated to be between $1 million and $10 million, and the more IP you use, the more expensive you will be. [24]

We can feel the license fee for Arm through a number: although Nvidia (NVIDA) did not successfully acquire Arm, it paid $750 million to Arm for Arm IP in the previous transaction. [25]

Royalty is the percentage fee for Arm after the chip is shipped. Royalties are the main profit point for most semiconductor IP design companies, and Arm royalties are generally about 1% or 3% of the final price of the chip.

It is worth noting that, in addition to authorization fees, there are a lot of money-burning projects to do CPU. If you are not careful, the money for financing will burn up. At present, there is a shortage of talents, and personnel expenditure will only increase but not decrease. Without experienced designers, we cannot do a good job in CPU;. Without EDA software, there is no basic tool for CPU, and EDA also needs authorization. High-performance CPU is generally an advanced process, which can quickly improve CPU performance, but the more advanced the process is, the more expensive it will be, and if it fails, it will have to bear high losses. There are many test items in the trial production stage, and the CPU products with poor stability will be eliminated.

According to our rough calculation, the total cost of a CPU product is more than 130 million yuan, from labor cost to licensing to successful streaming and trial production. If the cost of failure is reserved, the total expenditure will be even higher.

The cost of ▲ chip start-up, tabulation (fruit shell hard technology)

Note: this table is only a rough calculation and does not serve as an investment reference. The market fluctuates seriously. Please take the actual situation as the basis.

Although the original intention of domestic manufacturers is to produce independent and controllable CPU, externally, with the confrontation of great powers, the Arm instruction set itself has certain risks; internally, Arm, which has mastered the Arm instruction set, is also in a period of unrest, on the one hand, it comes from Softbank Corp. 's listing pressure, on the other hand, the problem of Chinese subsidiaries remains to be solved.

In addition, because Arm is too important to the semiconductor world, Arm's IPO raises industry concerns about future ownership and neutrality of the company, and many international giants are scrambling to plan acquisitions. Since the failure of Nvidia's acquisition, a company's way of annexing Arm seems to be unworkable, and then Intel, SK Hynix, Qualcomm and other companies are eager to form a group acquisition. But if the acquirers are all American companies, it is equivalent to the control of Arm falling into the hands of the United States in disguise.

Although domestic companies can also buy permanent licenses for the current version of Arm, Arm itself is also evolving and will not be able to obtain subsequent new versions if sanctioned. In other words, there is always a risk of using Arm.

Therefore, the industry is skeptical about this wave of Arm CPU venture capital. Arm CPU was built to jump out of the x86 dilemma, but will it end up jumping from one pit to another? In addition, at this stage, investors invest in the Arm CPU project, there is a tuyere, do not consider the serious homogenization of the current situation, do not consider whether the valuation is too high, how to exit the follow-up project? Can the secondary market catch it?

Now, it doesn't matter so much, get in the car first.

Referenc

[1] Intel:CPU vs GPU: What's the Difference. https://www.intel.co.uk/content/www/uk/en/products/docs/processors/cpu-vs-gpu.html

[2] Intel:Architecture-Intel ®Technology Innovation. https://www.intel.co.uk/content/www/uk/en/silicon-innovations/6-pillars/architecture.html

[3] China Evaluation: White Paper on CPU Technology and Industry (2021). 2021.9. Https://www.cstc.org.cn/ CPUjishuyuchanyebaipishu.pdf

[4] Huaan Securities: Godson will land on Kechuang Board and focus on domestic CPU investment opportunities. 2021.6.14. Https://pdf.dfcfw.com/ pdf / H3_AP202206141572028208_1.pdf?1655200996000.pdf

[5] Arm Community: both revenue and profit of Arm hit new highs in fiscal year 2021. 2022.5.13. Https://mp.weixin.qq.com/ s / TOEKNaN--fFcQ2Zjhn-cpQ

[6] Pacific Securities: continue to be optimistic about the ARM industry chain headed by the Great Wall of China. 2021.8.8. Http://qccdata.qichacha.com/ ReportData / PDF / ce1f92c12d42f8883bdf356e06b7f9ea.pdf

[7] Semiconductor industry observation: the past of PowerPC. 2020.7.8. Https://mp.weixin.qq.com/ s / PyNYOQoi1MSk4eozSIcPHg

[8] Apple:Apple to Use Intel Microprocessors Beginning in 2006.2005.6.6. Https://www.apple.com/newsroom/2005/06/06Apple-to-Use-Intel-Microprocessors-Beginning-in-2006/

[9] Apple:Apple announces Mac transition to Apple silicon.2020.6.22. https://www.apple.com/newsroom/2020/06/apple-announces-mac-transition-to-apple-silicon/

[10] Geekbench:MacBook Pro (13-inch Late 2020) Benchmarks. https://browser.geekbench.com/macs/macbook-pro-13-inch-late-2020

[11] PassMark:Single Thread Performance. https://www.cpubenchmark.net/singleThread.html

[12] WccfTech:Intel And AMD x86 Mobility CPUs Destroy Apple's M1 In Cinebench R23 Benchmark Results.2020.11.17. https://wccftech.com/intel-and-amd-x86-mobility-cpus-destroy-apples-m1-in-cinebench-r23-benchmark-results/

[13] IT168: Apple chip M1 is really good to fight? Intel: look at this group of comparisons before coming to a conclusion. 2021.3.16. Https://mp.weixin.qq.com/ s / v491r3_2l5txhxlpvF1XfA

[14] Apple:Apple unveils M2, taking the breakthrough performance and capabilities of M1 even further.2022.6.6. https://www.apple.com.cn/newsroom/2022/06/apple-unveils-m2-with-breakthrough-performance-and-capabilities/

[15] Ma Wei, Yao Jingbo, Chang Yongsheng, Xie Wei. Present situation and prospect of domestic CPU development [J]. Integrated circuit application

Zhu Bin, Xing Yanning, Yao Lin, Sun Jiaxing. Discussion on the Development Strategy of CPU in China [J]. China Integrated Circuits, 2011 Jing 20 (09): 13-20.

[17] SHEN J P,LIPASTI M H. Modern Processor Design: Fundamentals of Superscalar Processors [M]. WavelandPress, 2013.

[18] WANG W.An improved instruction-level power and energy model for RISC microprocessors[D] .Southampton: University of Southampton, 2017.

[19] ExtremeTech:Intel Plans to License Hybrid Chips That Combine ARM, RISC-V, and x86.2022.2.16 https://www.extremetech.com/computing/331740-intel-plans-to-license-cores-that-combine-arm-risc-v-and-x86

[20] SeekingAlpha:Overhyped Apple Silicon: Arm Vs. X86 Is Irrelevant.2021.8.10. https://seekingalpha.com/article/4447703-overhyped-apple-silicon-arm-vs-x86-is-irrelevant

[21] Tom's Hardware:AMD Gains CPU Share Amid Biggest Desktop PC Quarterly Decline In History.2022.5.11. https://www.tomshardware.com/news/amd-share-skyrockets-amid-biggest-quarterly-desktop-pc-decline-in-history

[22] SeekingAlpha:Qualcomm: Arm CPU Market Presents $3.8Bln Opportunity.2022.2.28. https://seekingalpha.com/article/4491550-qualcomm-arm-cpu-market-presents-3-8-bln-opportunity

[23] AnandTech:Arm Flexible Access: Design the SoC Before Spending Money.2019.7.16. https://www.anandtech.com/show/14644/arm-flexible-access-design-the-soc-before-spending-money

[24] Strategyzer:Business Model Example-Arm. https://www.strategyzer.com/business-model-examples/arm-business-model

[25] Barron's:SoftBank Deal to Sell Arm Has $1.25 Billion Breakup Clause. Nvidia Pays $750 Million Licensing Fee.2020.9.18. Https://www.barrons.com/articles/softbank-deal-to-sell-arm-has-1-25-billion-breakup-clause-nvidia-pays-750-million-licensing-fee-51600459412

This article comes from the official account of Wechat: fruit Shell hard Technology (ID:guokr233), author: Fu Bin, Editor: Li Tuo

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