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Arm Plans To Revoke Qualcomm's Chip Design License.

Update Time: Oct 29, 2024    Readership: 460

Arm Plans To Revoke Qualcomm's Chip Design License.

According to reports, UK-based Arm Holdings Plc plans to end its long-term partnership with Qualcomm, no longer allowing Qualcomm to use Arm's intellectual property to design chips. Based on a document, Arm has issued a 60-day notice to Qualcomm to terminate their architecture licensing agreement. This move could disrupt the smartphone and PC markets and impact the financial and operational stability of both semiconductor giants.

Qualcomm sells hundreds of millions of processors annually, with most Android smartphones using this technology. If the agreement is indeed terminated, Qualcomm may have to cease selling products that contribute significantly to its $39 billion in revenue, or it could face substantial compensation claims. Over the past two years, Arm has been suing Qualcomm for contract breach and trademark infringement. The core of their dispute lies in Qualcomm’s acquisition of another Arm licensee in 2021 and Arm’s failure to renegotiate contract terms.

In August 2022, Arm filed a lawsuit in Delaware, USA, accusing Qualcomm of developing new products using technology acquired from Nuvia without negotiating a new license. Arm believes that, following Qualcomm's acquisition of Nuvia, using Nuvia's custom chip designs without Arm's consent violates their previous licensing agreement. Arm has demanded that Qualcomm pay compensation and destroy any designs from before the Nuvia acquisition. Qualcomm countersued, asserting that it had not engaged in any wrongdoing and that Arm cannot demand the destruction of processors built using Nuvia’s intellectual property. Qualcomm argues that its existing agreement covers the activities of its acquired chip design startup, Nuvia.

The deteriorating relationship between these two partners dates back to Qualcomm's acquisition announcement in 2021, where it paid $1.4 billion to acquire chip design company Nuvia. This transaction attracted significant attention in the semiconductor industry, as Nuvia's three co-founders were core technical leads on Apple's A-series chip team. Qualcomm’s goal with the acquisition was to enhance the performance of its next-generation CPUs. Qualcomm succeeded in releasing the Snapdragon X Elite processor two years later, which demonstrated powerful performance and efficiency, outperforming Intel's Core i9 and even Apple's custom M3 processor. However, alongside Nuvia’s industry acclaim, Qualcomm also faced litigation.

Latest Responses from Both Sides: In response to recent news that "Arm intends to revoke Qualcomm’s license for new product designs," a Qualcomm spokesperson stated, “This is typical of Arm—yet another baseless threat aimed at pressuring a longstanding partner, disrupting our market-leading CPU products, and disregarding the broad rights already covered under our architecture license agreement. Arm’s last-ditch tactic, taken just before the December court proceedings, seems intended to interfere with the legal process, and its demand to terminate the licensing agreement is unfounded. We are confident that the rights covered in Qualcomm’s agreement with Arm will be upheld by the court. Arm’s anti-competitive behavior will not be tolerated.”

At the same time, Arm also responded to the issue of issuing a mandatory 60-day notice to terminate its long-term partner Qualcomm's architecture licensing agreement: "Due to Qualcomm’s repeated serious breaches of the Arm licensing agreement, Arm has had no choice but to take formal action to demand that Qualcomm correct its violations, or face the consequence of termination of the agreement. This step is critical to protect the ecosystem that Arm and its partners have built together over the past 30 years. Arm is fully prepared for the December hearing and is confident that the court will rule in favor of Arm.