Arm is scrapping an architectural licence agreement that allowed Qualcomm to use its intellectual property for chip development, as reported by Bloomberg News. According to the report, Arm issued Qualcomm a mandatory 60-day notice informing the latter of the termination of its current licensing arrangement. This deal had permitted Qualcomm to design and produce chips based on Arm’s technology standards.
This decision unfolds amidst an ongoing legal dispute between the two tech companies. Earlier in 2022, UK-based Arm, which is primarily owned by Japan’s SoftBank Group, sued Qualcomm on the grounds that the chips manufacturer did not negotiate a new licence following its acquisition of Nuvia, a chip design startup.
Established by former Apple and Google executives, Nuvia develops its own custom high-performance processor designs based on the Arm architecture. Qualcomm purchased the chip startup for $1.4bn in 2021.
Arm argues that the chip design currently intended for Microsoft’s Copilot+ laptops is a direct evolution of Nuvia’s technology, leading it to revoke the licence associated with these chips.
Qualcomm outrage
A spokesperson for Qualcomm hinted at the firm’s anger with ARM over the latter’s decision to terminate its licensing agreement. “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 under our architecture licence,” a Qualcomm spokesperson reportedly responded through an email.
The statement further argued that, “[w]ith a trial fast approaching in December, Arm’s desperate ploy appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless. We are confident that Qualcomm’s rights under its agreement with Arm will be affirmed. Arm’s anticompetitive conduct will not be tolerated.”
The legal proceedings between the two companies are scheduled to commence in federal court in Delaware in December 2024. Should Arm succeed in the litigation, Qualcomm and its partners, including Microsoft, could be required to halt shipments of new laptops using the disputed chips. Such a verdict could also potentially impact one of Qualcomm’s key strategic acquisitions in recent years.
Regardless of the public dispute, some analysts and investors remain hopeful that the two firms, which rely heavily on each other for revenue and innovation, will reach a settlement before the trial.
Earlier this week, Qualcomm announced its plan to integrate technology originally developed for its laptop chips into its mobile phone chips, aiming to enhance its capabilities for generative artificial intelligence (AI) tasks with a focus on on-device functionality.
The US semiconductor giant is prioritising generative AI by embedding AI features into its Snapdragon platforms. This integration will allow smartphones and other devices to carry out real-time AI functions without depending upon cloud processing.
Read more: Qualcomm brings laptop chip technology to mobile devices for AI enhancement
