Qualcomm and Arm Holdings are meeting in the U.S. District Court of Delaware today to determine the fate of ARM-chips at scale as a week-long battle over licensing violations looms over the tech industry.
While Qualcomm’s business might be synonymous with ARM chips, it is in fact just a license of technology from the company with the titular name, Arm Holdings. However, Qualcomm may soon lose the ability to license the technology behind the ARM chip architecture that powers its revitalized PC SoC business due to its “repeated material breach of Arm’s license agreement.”
According to Arm Holdings, Qualcomm has continually ignored calls to reimburse the company on extenuating circumstances that Arm believes alter the status of their initial contract.
Arm Holdings believes that Qualcomm twice violated the terms of the license agreement between itself and Qualcomm when the latter acquired another former licensee in Nuvia in 2021 as well as not fulfilling Nuvia’s established license agreement with Arm separately.
Arm is filing this claim to protect Arm, our partners, and the unparalleled ecosystem we have built together. Arm and its partners have invested billions of dollars to create industry-leading intellectual property. Because Qualcomm attempted to transfer Nuvia licenses without Arm’s consent, which is a standard restriction under Arm’s license agreements, Nuvia’s licenses terminated in March 2022. Before and after that date, Arm made multiple good faith efforts to seek a resolution. In contrast, Qualcomm has breached the terms of the Arm license agreement by continuing development under the terminated licenses. Arm was left with no choice other than to bring this claim against Qualcomm and Nuvia to protect our IP, our business, and to ensure customers are able to access valid Arm-based products.
Phil Hughes
Vice President, External Communications
After failing to address either of Arm Holdings’ claims, the company nixed Nuvia’s license which meant that Qualcomm could no longer use the chips designed by the former Apple Arm chip developer within its products. Arm went even further in requesting that Qualcomm not only stop pumping out chips based on its licensed architecture, but to destroy any current products on shelves or potential devices that were scheduled to be released in the future.
Fast forward three years and Qualcomm continues to work on and develop new chips based on Arm Holdings’ licensed technology via Nuvia produced Snapdragon X series processors which has led to today’s meeting between the two.
Beyond the over-the-top request from Arm Holdings to add to mounting a pile of e-waste around the globe by destroying products, another mitigating factor to previous arbitration between the two is their complicated business ties to one another. Qualcomm remains one of Arm Holdings’ largest license partners and has already had to adjust its earnings projections for investors with the understanding that if the company was successful in forcing Qualcomm to trash its current and future products, would tank its own stock.
Understandably, with Qualcomm moving more into PC chip development and expanding its customer base it makes sense that Arm would like to see the financial benefits from a foundation built on its technology license, but it seems the most likely outcome is a retroactive fine and “good day” for both parties.
