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Hi Lex55Playing devils advocate for a minute, my calculate revenue by royalties x price of royalties. With all these partnerships coming out and interconnecting with their own ecosystems it would be easy to imagine market(s) saturation. @MC🐠 thanks.
What I’m not 100% convinced on is average price per royalty, could we be potentially over estimating here? @Fact Finder what do you think?
Comparing ARM Holdings, they have 2021 revenue of $2.7b from a total of ~$30b chips sold this year which gives an average of $0.10 revenue per chip. Why is this so low?
Arm Delivers Record Revenues and Record Profits in FY21
2021 total revenues were up 35% to $2.7Bn with strong growth in both royalty and non-royalty revenue.www.arm.com
Makes me wonder if we’re doing IP, and agreements aren’t disclosed, then what are the chances we could be overstating this 10x.
Or does it even matter, with a conservative $60b market by 2025 and Akida being best in class/ first in class we achieve a more likely 50% share like @chapman89 says, then multiply by 15x (ARM ranges from 10-25x) we get $450bn USD MC. Hmm…
There has been some criticism of how ARM works in terms of maximising its revenue but the first real differentiator to Brainchip is that Brainchip owns the IP to the AKIDA Neural fabric and as such unlike ARM that has multiple different companies even Brainchip's IP it does not have to share the royalties from AKIDA.
ARM will however have to pass on royalties to Brainchip. So the average return of 10 cents a chip even when the primary IP is belongs to someone else is not bad though as I said some commentators think that is low and could be improved. Nvidia certainly did.
The ARM revenue model is therefore not the Brainchip revenue model the only similarity between the two is that ARM like Brainchip is fabless.
Now you could argue that ARM is less risky in its approach as it is not dependent on one IP to take on the world as Brainchip does but if the AKIDA IP is revolutionary, best in class and 3 years ahead of the next competitor and in the right space at the right time the extra risk is significantly diminished and the profit margin is as the former CEO Mr. Dinardo stated in the order of 97%.
On the question of how much will be received as a royalty is an open question and the best we have on this is in the first Pitt Street Research Report from last year and it is worth revisiting.
My opinion only DYOR
FF
AKIDA BALLISTA
PS: If you take 1% of the 200 billion automotive semiconductor market by 2040, 1% of the edge 71 billion market by 2025 and 1% of the 188 billion medical market I think that this adds up to more than 2.7 billion and Brainchip does not share as ARM does.