Arm and Qualcomm’s IP licensing lawsuit set to be settled

Table of Contents

Nuvia acquisition

The deterioration in the relationship between Arm and Qualcomm can be traced back to an acquisition deal three years ago. In 2021, Qualcomm announced that it would spend US$1.4 billion to acquire Nuvia, a chip design company that was founded only two years ago.

Nuvia’s chip design can help it significantly improve the performance of next-generation CPUs and achieve major breakthroughs in new growth areas such as notebook computers and data centers. The outside world predicted at that time that after Qualcomm acquired Nuvia, it might usher in a performance explosion in the field of notebook processors.

Sure enough, Qualcomm released the Snapdragon X Elite processor at the Snapdragon Technology Summit in the fall of 2023. Its powerful performance and energy efficiency not only overwhelmed Intel’s Core 9, but even surpassed Apple’s own customized M3 processor. The Snapdragon X Elite processor also realized a generative AI landing terminal, laying the foundation for the subsequent launch of Copilot+ PC in cooperation with Microsoft.

ARM interfered with it

The biggest threat to the popularity of Qualcomm Snapdragon X processors in Windows PCs comes not from competitor Intel, but from its partner, the intellectual property licensee of Qualcomm Snapdragon Over the past two years, Arm has been suing Qualcomm for breach of contract and patent infringement.

The relationship between ARM and Qualcomm

Qualcomm is Arm’s second largest source of revenue, and Arm is Qualcomm’s largest technology partner.

The impact of the ARM and Qualcomm cases

If ARM wins the lawsuit, all Windows laptops using Qualcomm processors will be banned, and even Microsoft will not be immune.

ARM disagrees the licensing agreements before Qualcomm acquired Nuvia

The real obstacle to Qualcomm’s acquisition of Nuvia comes from Arm. In August 2022, Arm filed a lawsuit against Qualcomm and Nuvia in the Delaware court, accusing them of violating Arm’s licensing agreement. Arm announced the withdrawal of its licensing agreement with Nuvia and required Qualcomm not to use Nuvia’s chip design.

After Qualcomm acquires Nuvia, future chip designs will largely use customized computing cores designed by the latter, rather than using Arm’s public version architecture. After Qualcomm acquired Nuvia, it used Nuvia’s customized chip design without Arm’s consent, which violated the previous licensing agreement. Therefore, Arm has the right to revoke the licensing agreement and require Qualcomm to destroy chip products based on Nuvia. and pay compensation to ARM.

Points of dispute between the two sides

Arm hopes that chip manufacturers will use more of their own Cortex designs because the licensing fees that Arm can charge are much higher. But Qualcomm insists on using its own modified Nuvia platform, which signed an old agreement with a very low licensing fee. ARM was very dissatisfied with Qualcomm’s licensing fees after acquiring Nuvia, and Qualcomm did not intend to pay two licensing fees.

ARM has bigger picture

Of course, ARM had his own plans. Because the WOA (Windows on Arm) exclusive cooperation agreement between Microsoft and Qualcomm will expire in 2024, new chip giants may enter the market by then, and Qualcomm must seize the opportunity to seize market opportunities. When the exclusive cooperation period expires, not only Intel and AMD will launch their own AI PC chips, Qualcomm Snapdragon X Elite will no longer be the only choice for Amou chips in the notebook field.

For WOA, please see my post of “How much potential does ARM’s WOA (Windows on ARM) has?“

Chip giants such as Nvidia, AMD, and MediaTek are already eager to try in this area. There are market rumors that Nvidia will cooperate with MediaTek to launch PC processors next year.

Conclusion

Because the case involves so many aspects and has a great impact on the entire industry, people in the industry unanimously believe that the two parties will reach a settlement.

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