Arm Holdings cancels Qualcomm's chip design license amid legal dispute
Arm Holdings has decided to revoke a license that allowed Qualcomm to use its intellectual property for chip design. The move escalates an ongoing legal battle over critical smartphone technology. The UK-based firm has given Qualcomm a 60-day notice of termination of their architectural license agreement, according to a document seen by Bloomberg.
Impact on smartphone and PC markets
The termination of this agreement could potentially disrupt the smartphone and personal computer markets. It may also impact the financials and operations of two significant players in the semiconductor industry. Qualcomm, a major supplier of processors used in most Android smartphones, could face substantial challenges if the cancelation is implemented.
Arm's legal battle with Qualcomm
The legal battle between Arm and Qualcomm started in 2022 when the former accused the latter of contract breach and trademark infringement. The termination notice gives Qualcomm an eight-week period to fix the issue. However, neither of the companies has commented on this development. A trial is pending to settle Arm's breach-of-contract claim and a countersuit from Qualcomm.
Disagreement over Qualcomm's acquisition of Nuvia
The dispute between the two companies originated from Qualcomm's 2021 purchase of another Arm licensee, Nuvia. Arm claims that Qualcomm did not renegotiate contract terms after the acquisition. However, Qualcomm insists that its current agreement encompasses the activities of the acquired company. Nuvia's microprocessor design work is integral to new personal computer chips that Qualcomm sells to companies such as HP and Microsoft.
Arm demands destruction of pre-acquisition Nuvia designs
Arm argues that Qualcomm's implementation of Nuvia's design in its Snapdragon chips for smartphones violates their license. The company is asking Qualcomm to destroy all Nuvia designs developed prior to the acquisition. As per the original lawsuit filed by Arm, these designs cannot be transferred to Qualcomm without explicit permission.
Potential consequences of license termination for Qualcomm
If Arm goes ahead with the license termination, Qualcomm would be prevented from using Arm's instruction set in its own designs. The company could still license Arm's blueprints under separate product agreements, but that would lead to major delays and possibly waste work already done. Despite their ongoing dispute, both companies remain closely tied technologically with Qualcomm not ready to cut ties with Arm just yet.
