ARM Holdings has notified Qualcomm of the cancellation of their architectural license agreement, a decision that could greatly affect the smartphone and personal computer markets, reports Bloomberg.
The UK-based semiconductor company provided Qualcomm with a 60-day notice.
Go deeper with GlobalData
The move escalates a legal conflict that has been brewing since Arm filed a lawsuit against Qualcomm in 2022 for breach of contract and trademark infringement.
The cancellation threatens Qualcomm’s ability to design its own chips based on Arm’s intellectual property, which is critical to its business.
Qualcomm, which generates approximately $39bn in revenue, could face a halt in sales of its products or substantial damage claims if the license cancellation is enforced.
The legal dispute centres on Qualcomm’s acquisition of chip-design startup Nuvia in 2021.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataArm claims that this acquisition violated the terms of their existing agreement, as Qualcomm allegedly failed to renegotiate the contract.
Qualcomm contends that its existing agreement encompasses the activities of Nuvia, whose microprocessor design is crucial for new artificial intelligence-focused laptops, branded as AI PCs..
Arm asserts that Qualcomm’s plan to integrate Nuvia’s Oryon design into its Snapdragon smartphone chips constitutes a breach of their licence.
It demands the destruction of Nuvia designs created before the acquisition, which cannot be transferred to Qualcomm without permission.
If Arm proceeds with the license termination, Qualcomm would be barred from creating its own designs with Arm’s instruction set, though it could still licence Arm’s blueprints under different agreements.
The legal confrontation is set for a trial in December at the federal court in Delaware.
A Qualcomm spokesperson in an email to Bloomberg said: “With 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.”
An Arm victory could compel Qualcomm and its partners, including Microsoft, to cease shipments of the new laptops and potentially reverse one of Qualcomm’s major strategic acquisitions.
In September 2024, Qualcomm initiated talks with Intel, led by CEO Cristiano Amon, to explore a potential acquisition, although no formal offer has been made.
