Arm Holdings has turned up the heat on Qualcomm, issuing a 60-day warning that could see the latter’s license for using Arm tech getting axed. Qualcomm is now facing the possibility of losing its rights to continue developing chips based on Arm’s architecture.
The deadline follows a longstanding legal spat revolving around Qualcomm’s $1.4 billion acquisition of Nuvia in 2021. Now the situation has escalated, as Arm seeks to revoke Qualcomm’s access to crucial chip technology.
The latest development, dated October 22, 2024, ties directly into Qualcomm’s integration of Nuvia’s custom Oryon CPUs. These custom chips, developed from Nuvia’s designs, are central to Qualcomm’s Snapdragon Elite processors, which power a range of devices, including ARM-based PCs that Qualcomm has been pushing in collaboration with Microsoft. This legal action could have widespread consequences, both for Qualcomm’s roadmap and the tech industry at large.
Official @Qualcomm statement from a spokesperson on the @Arm license news.
“This is more of the same from ARM – more unfounded threats designed to strongarm a longtime partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights…— Anshel Sag (@anshelsag) October 23, 2024
Nuvia’s Purchase: Root of the Fight
The legal fight started after Qualcomm bought Nuvia back in 2021. Nuvia had been working on CPU designs for servers, but Qualcomm quickly shifted gears and used those designs to build its own high-performance chips for mobile devices and laptops.
Arm, however, wasn’t happy with how this played out, claiming Qualcomm didn’t have the right to transfer Nuvia’s license without renegotiating. Arm’s 60-day notice is the latest step in a long series of legal back-and-forths over this licensing issue.
Qualcomm has repeatedly defended its position, maintaining that it fully inherited Nuvia’s licensing rights with the acquisition. But Arm, on the other hand, says Qualcomm needs to secure new agreements. If the issue isn’t resolved, Arm could follow through on canceling the license, putting Qualcomm’s future chip plans in jeopardy.
Snapdragon Elite and the PC Push
The chips at the center of the dispute aren’t just any processors. Qualcomm’s Oryon-powered CPUs have been gaining traction as they are essential for the Snapdragon Elite series, which Qualcomm has been aggressively marketing for Windows-based PCs. These chips, used in devices from major brands like Acer, Lenovo, and Microsoft, are designed to compete directly with Apple’s ARM-based silicon.
Earlier this year, Arm had already attempted to disrupt Qualcomm’s plans, issuing a directive in June 2024 to halt the launch of Qualcomm’s Snapdragon X chips, just a day before Copilot+ PCs were supposed to hit the market. Arm’s move at that time didn’t stop the release, but it showed that the company wasn’t backing down in its licensing dispute with Qualcomm.
Qualcomm’s Response: Business as Usual
Despite Arm’s latest threat, Qualcomm isn’t slowing down. On October 21, 2024, Qualcomm unveiled its new Snapdragon 8 Elite processor, featuring its Oryon custom CPU design.
The chip boasts improved performance, thanks to its enhanced CPU and GPU architecture, promising better AI capabilities and more efficient power use, especially for gamers and heavy mobile users. Qualcomm is banking on this chip to power high-end smartphones, and it’s expected to be a key component in Samsung’s Galaxy S25, which is slated for release in early 2025.
Qualcomm’s legal team, led by General Counsel Ann Chaplin, has dismissed Arm’s claims, insisting that Qualcomm’s license remains valid. Chaplin reiterated that the company is confident the courts will rule in its favor when the case goes to trial in Delaware in December.
The Stakes Are High for Both Sides
For Arm, this isn’t just about a single license—it’s about setting a precedent for how it handles licensing deals going forward. The company went public again in 2023, and its investors are watching closely as it seeks to maintain control over its intellectual property and secure revenue streams through higher licensing fees.
Arm’s argument is that Qualcomm’s shift toward developing its own custom chips, rather than relying entirely on Arm’s designs, has altered the dynamics of their original agreement, and they want a piece of the pie.
The December trial will be pivotal. If Arm succeeds, Qualcomm could be forced to rethink its entire chip strategy. On the flip side, a win for Qualcomm would cement its position as a leading force in the ARM-based chip market. The stakes are especially high given that Qualcomm has ambitions far beyond mobile devices, with plans to expand its chip technology into automotive, augmented reality, and other areas.
Legal Troubles: Not Just About Arm
This dispute isn’t Qualcomm’s only concern. The company is also dealing with other regulatory headaches. Just days before Arm issued its latest notice, reports emerged that Qualcomm had hit pause on its planned acquisition of Intel, a move that was supposed to help Qualcomm strengthen its hold on the global chip market. The decision to put the deal on hold came as regulatory scrutiny intensified, with concerns over how the U.S. political landscape might affect the acquisition.
At the same time, Qualcomm is still recovering from the botched launch of its Snapdragon X Elite developer kit, which was pulled from the market earlier this month due to design flaws and delays. While the kit’s failure was a blow, Qualcomm remains focused on its future products, especially its custom Oryon CPUs.
Last Updated on November 7, 2024 2:23 pm CET