ARM Cancels Qualcomm Chip Design Licence – Report

ARM Holding is reportedly cancelling a licence that allowed its long-term partner Qualcomm to use the British chip designer’s IP to design chips.

Bloomberg reported that it had seen a document that revealed that ARM has given Qualcomm a mandated 60-day notice of the cancellation of their so called architectural licence agreement.

The agreement had allowed Qualcomm to create its own chips based on standards owned by ARM, including its Snapdragon processors.

Legal dispute

If the report is accurate, this will be a major escalation of the reported legal dispute between the two firms, after Bloomberg had noted that ARM had sued Qualcomm for breach of contract back in 2022.

The legal feud between ARM and Qualcomm began after Qualcomm acquired chip design startup Nuvia for $1.4 billion back in 2021.

ARM had alleged that the acquisition amounted to a breach of contract as well as trademark infringement, because Nuvia had an existing agreement with ARM for chips based on its patented technology.

ARM had argued that Qualcomm had acquired their Nuvia licenses, violating ARM’s terms of agreement.

Qualcomm had counter-sued, alleging that ARM’s terms and conditions do not require renegotiation.

But ARM is not apparently backing down, and the licence suspension could potentially impact the smartphone and personal computer markets, as well as disrupt two of the most influential firms in the semiconductor industry.

Qualcomm shares fell about 5 percent in premarket trading on Wednesday after closing at $173.18 in New York on Tuesday.

ARM dropped about 1.1 percent before US markets opened after previously closing at $152.58.

Qualcomm response

Qualcomm sells hundreds of millions of processors annually, and its chips are used in the majority of Android smartphones. If the cancellation takes effect, the company might have to stop selling products that account for approximately $39 billion in revenue.

Representatives for ARM reportedly declined to comment.

But a Qualcomm spokesperson told other media outlets that the British company was trying to “strong-arm a longtime partner.”

“This is more of the same from ARM – more unfounded threats designed to strong-arm a long-time partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights under our architecture license,” a Qualcomm spokesperson told Reuters in an emailed statement.