Arm cancels Qualcomm's license to make ARM-based chips

Qualcomm and Arm Holdings Plc have a long-standing relationship that spans over a decade. Qualcomm has been selling ARM-based Snapdragon processors since 2017.

The conflict arose when Qualcomm acquired Nuvia, a startup developing custom ARM-based CPUs. In 2022, Arm filed a lawsuit against Qualcomm and its subsidiary Nuvia for breaching license agreements and trademark infringement. Arm claimed that Qualcomm attempted to transfer Nuvia licenses without Arm's consent, a standard restriction under Arm's licensing agreements. Arm alleges in its lawsuit that Qualcomm's continued development after the termination of the licenses constitutes a breach of the license agreement.

Currently, Arm is revoking the license that allowed Qualcomm to use Arm's intellectual property for chip design. According to Bloomberg, Arm has issued Qualcomm a mandatory 60-day notice of the architectural license agreement's cancellation. Without this license, Qualcomm cannot create its own chips based on Arm's architecture. This could significantly disrupt the smartphone industry, where Qualcomm ships hundreds of millions of processors annually. Additionally, many major automakers rely on Qualcomm chips for their latest vehicles.

Qualcomm responded to Arm's license cancelation with the following statement:

“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 license. 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.”

Following the Nuvia acquisition, Qualcomm abandoned ARM's Cortex CPU designs in favor of its own Nuvia Phoenix-based Oryon CPUs in chips designed for PCs, smartphones, and cars. While using ARM's CPU designs, Qualcomm generally lagged behind Apple's performance. However, thanks to the Nuvia acquisition and the custom Oryon CPUs, Qualcomm has been able to surpasse Apple chips performance in the smartphone and PC markets. If Qualcomm fails to negotiate with Arm, it may be forced to discontinue Oryon CPUs in its latest processors.

The outcome of this legal battle holds significant implications for the future of Qualcomm and the broader tech industry. It remains to be seen whether Qualcomm can negotiate a resolution with Arm or if it will be forced to abandon its custom CPU designs. The resolution of this dispute will likely shape the competitive landscape of the processor market.

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