Arm Threatens to Revoke Qualcomm's Chip Design License, Jeopardizing AI PC and Mobile Chip Production

Why Arm Stock Is Sinking today | The Motley Fool

The legal disputes between Arm and Qualcomm are heating up -- and billions of dollars in revenue for both companies are at stake. Shares of Arm (ARM -7.15%) lost ground in Wednesday morning trading. The semiconductor company's stock price was down by 6.1% as of 12:55 p.m. ET. Bloomberg published a report Tuesday night stating that Arm had informed Qualcomm that it plans to cancel its chip design architecture licensing arrangement. If that does happen, it could result in significant sales and earnings declines for both chip companies. Qualcomm stock was down 3.4% as of this writing. Qualcomm uses the design architectures that it licenses from Arm in its central processing units (CPUs) for mobile devices and computers, but the companies' relationship has been jeopardized by legal and contractual disputes. Arm has now reportedly issued a required 60-day notice indicating that it plans to cancel Qualcomm's licensing rights. If that license were to be canceled, Qualcomm could be prevented from selling new products based on Arm's architectures. The dispute between the two companies appears to be connected to civil litigation that's set to go to trial in December. Arm has filed a breach-of-contract suit against Qualcomm over the latter company's acquisition of chip designer Nuvia in 2021. Arm's suit alleges that Qualcomm did not complete the required contract renegotiations after acquiring Nuvia -- a company that licensed Arm's architecture. Nuvia's designs have been used in Qualcomm's chips for artificial intelligence (AI) PCs and are slated to be incorporated into its new Snapdragon mobile processors, but Arm is arguing that designs using its architecture could not be transferred to Qualcomm as part of the acquisition. In turn, Qualcomm filed a countersuit -- and the disputes are intensifying as the trial date nears. Arm's core business is licensing its designs, and Qualcomm is a key customer. Some estimates suggest that if it cancels its license with Arm, Qualcomm could lose roughly $39 billion in annual sales. Ending their deal would lead to a major sales decline for Arm as well. On the other hand, these issues may be resolved before it comes to that. Analysts covering the chip industry for JPMorgan Chase expect that the magnitude of potential lost revenues for both companies will drive the two sides to come to an agreement. Meanwhile, analysts for Bloomberg Intelligence said they expected the licensing deals will be renegotiated, and that Qualcomm will end up paying higher licensing rates on chips from Nuvia that use Arm's architecture.

Arm cancels Qualcomm's chip design licence amid legal dispute

SoftBank's Arm has told US chipmaker Qualcomm it will cancel its chip design licence, raising the stakes in an intellectual property dispute set to go to trial in December. Qualcomm confirmed the move on Tuesday, accusing Arm of "strong-arm" tactics designed to increase royalty rates for its intellectual property, which will "disrupt the legal process" under way in the US. Many of Qualcomm's chips use Arm's design architecture, meaning a revocation of its licence potentially puts billions of dollars of revenue at risk. The relationship between the two chipmakers soured in 2022, when Arm sued Qualcomm, one of its biggest customers, over its $1.4bn acquisition of chip design firm Nuvia. Arm claims the deal led to the use of its intellectual property without its permission, allegations Qualcomm denies. The litigation has shone a light on its complicated licensing arrangements for its chip design architectures. In its statement, Qualcomm said that Arm's justification for terminating the licensing contract was "completely baseless". It added: "This is more of the same from Arm -- more unfounded threats designed to strong-arm a longtime partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights under our architecture licence." Arm declined to comment. Qualcomm and Arm's shares did not immediately react to the news in after-hours trading on Tuesday. The high-stakes clash between two of the world's most prominent chip companies comes as both are riding a wave of optimism around artificial intelligence. Their shares have risen higher this year, driven by expectations that new generative AI applications such as virtual assistants will boost hardware sales. The news of the legal document sent to Qualcomm was first reported by Bloomberg. Arm's move triggers a mandatory 60-day period for Qualcomm to respond before the licence is revoked. UK-based Arm, acquired by Japan's SoftBank in 2016, made its blockbuster debut on the US Nasdaq in September last year. The company's chip designs are used by a wide range of companies including Nvidia and Apple. This week, Qualcomm is holding its annual tech summit in Hawaii, where it announced a new processing chip for mobile phones, the 'Snapdragon 8 elite'. Earlier this year, Qualcomm unveiled a line of CPU chips for a new generation of AI-enabled PCs based on Arm's architecture. Chief executive Rene Haas has described Arm as the "most ubiquitous computer architecture on the planet". It competes with X86, the architecture used by Qualcomm rivals Intel and AMD. The patent fight with Qualcomm is due to go to trial in Delaware on December 16.

Arm cancels Qualcomm's license to use its chip design standards

Arm has taken its feud with Qualcomm to the next level, two years after filing a lawsuit against its former close partner. According to Bloomberg, the British semiconductor company has canceled the architecture license allowing Qualcomm to use its intellectual property and standards for chip design. As the news organization notes, Qualcomm, like many other chipmakers, uses Arm's computer code that chips need to run software, such as operating systems. Arm has reportedly sent Qualcomm a 60-day notice of cancelation -- if they don't get to an agreement by then, it could have a huge impact on both companies' finances and on Qualcomm's operations. The SoftBank-backed chipmaker sued Qualcomm in 2022 after the latter purchased a company called Nuvia, which is one of its other licensees. Arm argued that the US company didn't obtain the necessary permits to transfer Nuvia's licenses. As such, Nuvia breached their contract and it had terminated its licenses, Arm explained in its lawsuit. Qualcomm has been using Nuvia-developed technology in the chips designed for AI PCs, such as those from Microsoft and HP. But Arm wants the company to stop using Nuvia-developed tech and to destroy any Arm-based technology developed prior to the acquisition. Qualcomm will have to stop selling most of the chips that account for its $39 billion in revenue, Bloomberg says, if the companies don't resolve the issue within the next 60 days. It seems the US chipmaker believes this is a tactic by Arm to threaten its business and to get higher royalties, because its spokesperson told Bloomberg and the Financial Times: "This is more of the same from Arm -- more unfounded threats designed to strong-arm a longtime partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights under our architecture license." Qualcomm also accused Arm of attempting to disrupt the legal process, called its grounds for licensing termination "completely baseless" and said that it's confident its "rights under its agreement with Arm will be affirmed."

Arm reportedly warns Qualcomm it will cancel its licenses

Chip designer Arm has reportedly warned chipmaker Qualcomm it will soon cancel its license to produce processors using its IP. News of that drastic step emerged on Tuesday in a Bloomberg report that claims the newswire has seen an Arm document sent to Qualcomm that warns its architectural license will be cancelled in 60 days. It's believed the threat is related to Qualcomm's 2022 acquisition of Nuvia, an Arm licensee. Nuvia's license allowed it to develop custom chips based on Arm IP. Arm claimed the license issued to Nuvia did not transfer to Qualcomm, and the matter has been disputed ever since. Nuvia's tech has since become the Oryon custom CPU cores that Qualcomm deployed in the Snapdragon Elite range of SoCs that now power Copilot+ PCs - Microsoft's designation for PCs capable of running on-device AI. Just this week, Qualcomm also announced Oryon-powered SoCs for mobile devices. If Qualcomm loses its Nuvia-linked license, its latest and greatest product lines would therefore be toast. Bloomberg reports that the threat to tear up the license comes with an eight-week deadline to resolve the dispute. A Qualcomm spokesperson told us "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." Qualcomm has every right to be angry as the timing of the report is delicious: Qualcomm is in the middle of its annual Snapdragon Summit - a gabfest at which it shows off its latest and greatest. It's an amazing coincidence that Bloomberg was able to view a legal document at this time. Such a document certainly gives Qualcomm plenty to think about, as its PC-and-smartphone-making customers will want certainty around future supply. Arm itself has investors to satisfy. The design studio returned to partial public ownership in 2023, but Japanese investment house SoftBank remains its majority shareholder. The Register has sought comment from Arm but had not received a reply at the time of publication. We've grabbed some popcorn while we wait for a response. ®

Arm Escalates Legal Feud With Qualcomm -- Terminates Snapdragon X Elite License

Qualcomm risks losing over $39 billion in revenue if the license is revoked. SoftBank Group's Arm has announced it will revoke U.S. chipmaker Qualcomm's chip design license amid the AI heavyweights' legal battle. Qualcomm said the move was a "strong-arm" tactic that could potentially cost the company billions of dollars in revenue. Arm Terminates License Bloomberg reported the feud over a license revocation that would result in Qualcomm losing the ability to sell and create its own chips. Arm's architecture, which has been used to develop over 230 billion chips since 2003, is used in laptops, tablets, and around 99% of the world's premium smartphones. Qualcomm's Snapdragon processors are currently used in most Android smartphones, laptops, and gaming devices. A license revocation would mean that Qualcomm would lose the ability to sell this product, which currently generates the company over $39 billion in revenue. Arm V. Qualcomm U.K.-based Arm has been embroiled in a legal dispute since 2022 when it accused Qualcomm of breaching its licensing agreements in its $1.4 billion acquisition of chip designer Nuvia. Specifically, Arm claimed that the licenses it granted to Nuvia for its custom chip designs were non-transferable. Therefore, once Qualcomm acquired the firm, Arm argued that the U.S. chipmaker needed to negotiate a new licensing deal rather than continue to use Nuvia's licenses. Arm alleged that Qualcomm's use of the Nuvia-designed chips without a new agreement violated intellectual property rights. Qualcomm and Arm Drifting Apart For over two decades, Qualcomm and Arm have worked closely together. Qualcomm's success in the mobile industry was built on the efficiency and performance of Arm's architecture. At the same time, Arm benefited from Qualcomm's ability to scale the designs into some of the most popular consumer products globally. The U.S. chipmaker signed its first license with Arm in 1995. Since then, the company has renewed and expanded its licensing agreements with the chip designer. However, Arm's 2016 acquisition by Japan's SoftBank and the company's work towards an IPO, which was completed in 2023, caused Arm to begin tightening control over its intellectual property. Appointed in 2022, CEO Rene Haas has been more assertive about offering more complete solutions, especially in areas like AI and data centers. Qualcomm has also been increasingly working on its own designs, moving away from Arm's blueprints. The breakdown between the two companies highlights Big Tech's race to remain competitive amid increased competition in the AI space.

ARM vs Qualcomm: why their licensing feud goes beyond just a contract By Invezz

Invezz.com - In a significant escalation of their ongoing legal issues, Arm holdings has decided to terminate a major licensing deal with Qualcomm (NASDAQ:QCOM) on a 60-day notice. The termination notice has far reaching implications for Qualcomm as well as the smartphone and semiconductor markets. The reason this issue is important is because most of the android smartphones in use today utilize Qualcomm's technology. And most of Qualcomm's products that are used in these smartphones utilize ARM's intellectual property (IP). Qualcomm is also one of the biggest source of revenue for ARM. It is quite clear that both companies depend on each other for a lot of their business. Qualcomm generates $39 billion in revenue. Most of this comes from smartphones which use ARM based processors. An example is the Snapdragon line of processors that the company uses in most modern smartphones. For Qualcomm, a new area of growth is its entry into 'AI PCs'. The company sells snapdragon processors to major PC companies like HP and Microsoft (NASDAQ:MSFT). If QCOM is unable to sell those, it also becomes a big problem for companies involved in personal computing. Similarly for ARM, having good relationship with a major semiconductor company is important. The company generated $3.2 billion in revenue in the last fiscal year. $1.8 billion of those came from royalties while $1.4 billion came from licensing agreements. Both these revenue streams will take a hit if the company stops working with Qualcomm. At the centre of all this is a small firm by the name Nuvia. The processors that QCOM sells to DELL and Microsoft are based on Nuvia's processor design. Nuvia was acquired by QCOM in 2021. Like QCOM, Nuvia also licensed ARM technology to create its processor designs. At the start of this week, QCOM had announced that it was bringing an old Nuvia design called Oryon to its most recent snapdragon processors. Since Nuvia hadn't been acquired by QCOM when this design was created, ARM believes QCOM needs to license this technology from ARM, not Nuvia. Since ARM also sells its own chips, many see this as an opportunistic attempt to stop QCOM and take over its market share. A Qualcomm spokesperson had this to say about ARM's actions: (It) 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. Qualcomm stock is down over 3% on the news of the termination notice. This would dwarf in comparison to the carnage that an eventual termination will result in. For now, it seems the market is favoring a settlement. That would mean this is just an attempt from ARM to bring QCOM back to the negotiation table and renegotiate the terms of Nuvia licensing deal. If not, this might just be the beginning of a seismic shift in the smartphone industry.

SoftBank-Backed Arm Threatens To Cancel Qualcomm's Chip Design License Ahead Of Trial In December - Qualcomm (NASDAQ:QCOM), ARM Holdings (NASDAQ:ARM)

Qualcomm Inc. QCOM has been threatened by Arm Holdings Plc. ARM with cancelation of its chip design license, leaving the San Diego-based semiconductor giant with 60 days notice. What Happened: The architectural license agreement allows Qualcomm to make its chips based on Arm's standards. The showdown may potentially threaten the personal computers and the smartphone market, Bloomberg reported, citing a document. Every year, Qualcomm sells hundreds of millions of chips, which are the brains behind most Android smartphones and tablets. The chipmaker may have to stop selling products that generate a large portion of its around $39 billion in sales if the cancelation goes into force, or it may be subject to claims for significant damages, according to the report. Qualcomm's 2021 acquisition of another Arm licensee and its alleged failure to renegotiate contract conditions are at the heart of the dispute. Qualcomm contends that the operations of the chip-design firm Nuvia, which it acquired, are covered by its current agreement. According to Qualcomm, the SoftBank Group-backed British business was attempting to "strong-arm a longtime partner." It seems 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," the spokesperson said, according to the report. Qualcomm and Arm did not immediately respond to Benzinga's request for comment. See Also: Tesla's Fancy Data And Computing Claims Likely Will Not Impress Investors: Gary Black Highlights Drastic Jump In EV Disengagement Rates And Missing Robotaxi Details As Key Question Why It Matters: On Monday, Qualcomm unveiled its latest high-end smartphone SoC, the Snapdragon 8 Elite, which boasts a new Oryon CPU and enhanced AI capabilities. Qualcomm's Snapdragon 8 Gen 4 shipments are expected to rise 50% in late 2024, driving significant revenue and profit growth. Analyst notes Qualcomm poised for gains from AI smartphone growth and rising SoC prices, despite Apple Inc.'s 5G chip efforts. In early October, Honeywell International Inc. expanded its collaboration with Qualcomm to create new AI-enabled solutions for the energy sector. Price Action: On Tuesday, Qualcomm's shares ended the day up 2.47% at $173.18. After-hours trading saw a modest uptick in the stock, which was 0.0058%. Qualcomm's shares have surged 23.50% so far this year. Arm Holdings PLC, on the other hand, closed the trading day up 0.15% at $152.58. However, the price fell 0.12% during after-hours trade. Arm has increased by 121.39% so far this year, according to data from Benzinga Pro. Read Next: Boeing Gears Up For Q3 Print; Here Are The Recent Forecast Changes From Wall Street's Most Accurate Analysts Image Via Shutterstock Market News and Data brought to you by Benzinga APIs

Arm to Scrap Qualcomm Chip Design License in Feud Escalation

Arm is giving the US company an eight-week period to remedy the dispute Arm Holdings is canceling a license that allowed longtime partner Qualcomm to use Arm intellectual property to design chips, escalating a legal dispute over vital smartphone technology. Arm, based in the UK, has given Qualcomm a mandated 60-day notice of the cancellation of their so-called architectural license agreement, according to a document seen by Bloomberg. The contract allows Qualcomm to create its own chips based on standards owned by Arm. The showdown threatens to roil the smartphone and personal computer markets, as well as disrupting the finances and operations of two of the most influential companies in the semiconductor industry. Qualcomm sells hundreds of millions of processors annually -- technology used in the majority of Android smartphones. If the cancellation takes effect, the company might have to stop selling products that account for much of its roughly $39 billion (roughly Rs. 3,27,890 crore) in revenue, or face claims for massive damages. The move ratchets up a legal fight that began when Arm sued San Diego-based Qualcomm -- one of its biggest customers -- for breach of contract and trademark infringement in 2022. With the cancellation notice, Arm is giving the US company an eight-week period to remedy the dispute. Representatives for Arm declined to comment. A Qualcomm spokesperson said the British company was trying to "strong-arm a longtime partner." It "appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless," the spokesperson said in an emailed statement. "We are confident that Qualcomm's rights under its agreement with Arm will be affirmed." The two are headed to a trial to resolve the breach-of-contract claim by Arm and a countersuit by Qualcomm. The disagreement centers on Qualcomm's 2021 acquisition of another Arm licensee and a failure -- according to Arm -- to renegotiate contract terms. Qualcomm argues that its existing agreement covers the activities of the company that it purchased, the chip-design startup Nuvia. Nuvia's work on microprocessor design has become central to new personal computer chips that Qualcomm sells to companies such as HP and Microsoft. The processors are the key component to a new line of artificial intelligence-focused laptops dubbed AI PCs. Earlier this week, Qualcomm announced plans to bring Nuvia's design -- called Oryon -- to its more widely used Snapdragon chips for smartphones. Arm says that move is a breach of Qualcomm's license and is demanding that the company destroy Nuvia designs that were created before the Nuvia acquisition. They can't be transferred to Qualcomm without permission, according to the original suit filed by Arm in the US District Court in Delaware. Nuvia's licenses were terminated in February 2023 after negotiations failed to reach a resolution. Like many others in the chip industry, Qualcomm relies on an instruction set from Cambridge, England-based Arm, a company that has created much of the underlying technology for mobile electronics. An instruction set is the basic computer code that chips use to run software such as operating systems. If Arm follows through with the license termination, Qualcomm would be prevented from doing its own designs using Arm's instruction set. It would still be able to license Arm's blueprints under separate product agreements, but that path would cause significant delays and force the company to waste work that's already been done. Prior to the dispute, the two companies were close partners that helped advance the smartphone industry. Now, under newer leadership, both of them are pursuing strategies that increasingly make them competitors. Under Chief Executive Officer Rene Haas, Arm has shifted to offering more complete designs -- ones that companies can take directly to contract manufacturers. Haas believes that his company, still majority owned by Japan's SoftBank Group Corp., should be rewarded more for the engineering work it does. That shift encroaches on the business of Arm's traditional customers, like Qualcomm, who use Arm's technology in their own final chip designs. Meanwhile, under CEO Cristiano Amon, Qualcomm is moving away from using Arm designs and is prioritising its own work, something that potentially makes it a less lucrative customer for Arm. He's also expanding into new areas, most notably computing, where Arm is making its own push. But the two companies' technologies remain intertwined, and Qualcomm isn't yet in a position to make a clean break from Arm. Arm was acquired in 2016 by SoftBank, and part of it was sold to the public in an offering in September of last year. The Japanese company still owns more than 80 percent of the Arm. Arm has two types of customers: companies that use its designs as the basis for their chips and ones that create their own semiconductors and only license the Arm instruction set. Qualcomm is no stranger to licensing disputes. The company gets a large chunk of its profit from selling the rights to its own technology -- a key part of mobile wireless communications. Its customers include Samsung Electronics and Apple, the two biggest smartphone makers. Qualcomm emerged victorious in 2019 from a wide-ranging legal fight with Apple. It also won a court decision on appeal against the US Federal Trade Commission, which alleged that the company was using predatory licensing activities. © 2024 Bloomberg LP

Arm's 60-Day Notice to Qualcomm: Could the Smartphone Industry Be Headed for Disruption?

Arm's Ultimatum to Qualcomm: Potential Shocks to the Smartphone Market Arm Holdings has issued a 60-day ultimatum to Qualcomm, threatening to terminate their licensing agreement unless Qualcomm addresses Arm's complaints over alleged violations. The British chip technology firm accuses Qualcomm of using its chip designs without proper authorisation, stemming from Qualcomm's 2021 acquisition of chip developer Nuvia. This high-stakes conflict threatens Qualcomm's ability to use Arm's designs, with potential wide-ranging consequences for the smartphone industry. The core of the dispute centres around Qualcomm's $1.4 billion purchase of Nuvia, a company developing advanced processors including those for AI chips and Snapdragon smartphone processors. Arm alleges that Qualcomm has been using Nuvia's pre-acquisition designs without its authorization. As part of its ultimatum, Arm is demanding that Qualcomm destroy all chip designs related to Nuvia that existed before the acquisition. Qualcomm, however, has sharply criticized Arm's 60-day deadline, labelling it an "unfounded threat" aimed at derailing its operations. This dispute carries significant weight due to the critical role that both companies play in the tech industry. Qualcomm's Snapdragon processors power the majority of Android smartphones globally, relying heavily on Arm's architecture for its chipsets. Should Arm terminate its agreement, Qualcomm's product development could face substantial delays, potentially forcing the company to halt work on certain chips. Such a scenario would not only impact Qualcomm's business but could also ripple across the broader smartphone market, particularly for Android devices dependent on Snapdragon chips. Qualcomm has strongly denied Arm's accusations and plans to challenge them in court, with a trial scheduled for December. The company views Arm's claims as an attempt to hinder the development of new chips while driving up royalty fees, accusing Arm of anti-competitive behaviour. has positioned itself to fight the breach of contract claims, asserting that Arm's threats are groundless and designed to disrupt ongoing technological advancements. Should the termination of the licensing agreement by Arm become effective, there are indications that Qualcomm will be limited to the use of the blue designs only which have been pre-designed by Arm. This could adversely affect the continued development of future Snapdragon chips and cause delays in the launching of products which affects the entire smartphone industry. The end of this dispute will be interesting to observe as it has possibilities of recasting the state of affairs in the direction of design and chipsets in the mobile industry which is very broad.

Arm Ramps Up Qualcomm Legal Battle, Moves to Cancel Licensing Deal

A prolonged licensing dispute between Qualcomm and British chipmaker Arm escalated this week with Arm moving to cancel the deal it has with Qualcomm. As Bloomberg reports, Arm sent Qualcomm a 60-day notice of cancellation for an architectural license agreement that -- if executed -- could throw the chip and smartphone industries into disarray. The license lets Qualcomm create chips based on standards owned by Arm. Qualcomm tells Bloomberg that the cancellation "appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless." The two are set to face off at trial in December to resolve a case that dates back two years, when Arm sued Qualcomm over licenses related to chip designs from Nuvia, a company Qualcomm acquired in 2021. Nuvia was also an Arm licensee and Arm took issue with Qualcomm using Nuvia designs created with Arm technology without paying up. Arm terminated the Nuvia licenses in March 2022, but Qualcomm continued to use them, according to Arm. "Qualcomm attempted to transfer Nuvia licenses without Arm's consent, which is a standard restriction under Arm's license agreements," Arm said at the time. Bloomberg Intelligence analysts suggest the cancellation is a legal manuever that may end up "in a negotiated license granting the chipmaker rights to customize Arm architecture, but at higher royalty rate than Nuvia had been paying." This comes as Qualcomm is hosting its annual Snapdragon Summit. Among the announcements there is the Snapdragon 8 Elite Mobile Platform, which features custom-designed cores in the CPU, GPU, and NPU to dramatically improve speed, efficiency, and AI for next-gen flagship smartphones. That CPU, known as Oryon, is based in part on tech from Nuvia.

Arm Threatens to Revoke Qualcomm Processor License Amid Legal Dispute

Arm Holdings has formally notified Qualcomm Technologies of its intention to potentially terminate the license permitting Qualcomm to manufacture processors that utilize Arm's intellectual property. A Bloomberg report from Tuesday reveals that Arm has sent Qualcomm a document stating that the architectural license will be canceled within 60 days. This issue arises from Qualcomm's 2022 acquisition of Nuvia, an Arm licensee authorized to develop custom chips based on Arm's IP. Arm contends that the license granted to Nuvia was not transferable to Qualcomm, leading to an ongoing dispute between the two companies. Since the acquisition, Nuvia's technology has been developed into the Oryon custom CPU cores, which Qualcomm has integrated into its Snapdragon Elite series of System on Chips. These SoCs are currently powering Microsoft's Copilot Plus PCs, which are designed for on-device artificial intelligence operations. Additionally, Qualcomm has recently announced the use of Oryon-powered SoCs in mobile devices. The legal conflict, which has intensified over the past two years, centers on whether Qualcomm is permitted to use its proprietary Oryon cores instead of Arm's architectures. Arm argues that Qualcomm must continue using Arm-designed architectures and cannot switch to its own designs like Oryon. Qualcomm disputes this, asserting its right to independently develop processor architectures. The possible revocation of the license has significant implications for the technology industry, particularly for manufacturers of Android smartphones such as Samsung, Xiaomi, and OnePlus, which rely on Qualcomm's SoCs for their devices. Furthermore, Apple Inc., which uses Qualcomm's modems in its iPhone lineup, may face uncertainties regarding the continuity of modem supplies. Qualcomm has not yet received an official response from Arm regarding the license termination but has expressed its intention to challenge Arm's decision legally. A trial is scheduled for December, and the outcome of this dispute is expected to have major effects on both companies and the broader semiconductor industry. Source: Bloomberg

Bombshell in the tech sector: ARM will not allow Qualcomm to design chips in 60 days - Softonic

This move leaves the future of the world's most important low-power chip company up in the air ARM would have canceled a license granted to Qualcomm to design chips based on its technology, according to Bloomberg on Tuesday, October 22, 2024. How distant the news of Qualcomm buying Intel seems now, doesn't it? Apparently, the ARM conglomerate has notified Qualcomm of the cancellation with 60 days' notice, as required by law. This license allows Qualcomm, based in San Diego, to design its own chip based on ARM's chip standards. According to Bloomberg today, ARM is "canceling a license that allowed Qualcomm Inc., a long-time partner, to use ARM's intellectual property to design chips." If there is no resolution after the 60-day notification period, Qualcomm "might have to stop selling products... or face massive damage claims." This is what the consulted sources say: "If ARM proceeds with the license termination, Qualcomm would not be able to create its own designs using ARM's instruction set. It could still license ARM's blueprints under separate product agreements, but that route would cause considerable delays and force the company to waste work already done." The Bloomberg report comes just as Qualcomm has announced its new chips for mobile and automotive at its annual Snapdragon summit held in Hawaii. The chips represent milestones for Qualcomm, introducing new generative AI capabilities for phones, including the Xiaomi 15 and the Asus ROG 9 Phone, while automakers Mercedes-Benz and Li Auto have committed to using AI-compatible automotive chips in upcoming vehicles. Qualcomm did not confirm that these chips are designed based on ARM standards at the time of publication, but the company refuted ARM's cancellation in a statement. Looking ahead, this uncertainty about ARM could lead to the adoption of the open-source instruction set RISC-V.

Arm Reportedly Cancels License Qualcomm Used to Design Its Chips

Expertise Smartphones | Smartwatches | Tablets | Telecom industry | Mobile semiconductors | Mobile gaming Arm has reportedly canceled a license granted to Qualcomm to design chips based on its chip technology, according to a Bloomberg report on Tuesday. Arm has reportedly given Qualcomm a 60-day notice of the cancellation as required by law. This license lets the San Diego-based Qualcomm design its own silicon based on Arm chip standards. The Bloomberg report comes just as Qualcomm announced its new mobile and automotive chips at its annual Snapdragon Summit in Hawaii. The chips represent milestones for Qualcomm that debut new generative AI capabilities for phones, including the Xiaomi 15 and Asus ROG 9 Phone, while automakers Mercedes-Benz and Li Auto have committed to using the AI-supporting automotive chips in upcoming vehicles. Qualcomm didn't confirm that these chips are designed based on Arm standards by time of publication, but the company pushed back on Arm's cancellation in a statement. "This is more of the same from ARM -- more unfounded threats designed to strong-arm 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," Qualcomm's statement read. "We are confident that Qualcomm's rights under its agreement with Arm will be affirmed. Arm's anticompetitive conduct will not be tolerated."

Qualcomm in crisis? Chipmaker faces ban on license that allows it to produce Snapdragon chips -- this is huge

One threatened contract cancelation could spell disaster for phones, computers and more Snapdragon chips are found inside many of the mobile devices we use every day. But this status quo could soon be thrown up in the air due to a major business disagreement. Qualcomm, the company that makes Snapdragon chips, has been in a long-term legal battle with Arm, the company that designs instruction sets and parts for computer chips to then license out to companies like Qualcomm. And Arm is now trying to end the licensing agreement it has with Qualcomm, according to reporting by Bloomberg, giving it a 60-day warning of cancelation before it withdraws permission to use Arm-based tech. The source of this whole dispute is Qualcomm's purchase of a third company, Nuvia, in 2021. Because Nuvia itself had a licensing deal with Arm, Arm has sued, arguing that Qualcomm needs to stop developing Nuvia's technology, destroy any designs made pre-acquisition and negotiate new licensing terms. Meanwhile, Qualcomm has countersued, stating that its current agreement with Arm still stands, and business can carry on as usual. Nuvia is the source of Qualcomm's Oryon-series CPUs, as seen in chips like the newly-announced Snapdragon 8 Elite chip, made for next-gen Android flagship phones. It's a key part of Qualcomm's business, hence why this has proved to be so tricky to resolve, and why Arm's decided to raise the stakes. Many of the best phones use Qualcomm-built silicon, and several companies have already confirmed they'll use the new Snapdragon 8 Elite chip for their upcoming phones. But equally as important are Qualcomm's Snapdragon X Elite-powered AI PC laptops, which use the same Arm tech. This is a rapidly developing category which has caused a lot of excitement after years of these laptops using hot-running, power-hungry Intel and AMD chips (which run on a different underlying technology called x86). If Qualcomm were to lose its license, then computer, smartphone and other device makers would have to find alternative chips for their upcoming gadgets, and fast. If the license does end up suspended, Qualcomm would be able to make separate agreements to use Arm's own full chip designs, which would be a possible stop-gap before matters are settled. But this would be expensive considering the cost of new licensing and the loss of existing development that could no longer be used. Arm is giving Qualcomm 60 days to comply, which means there's still time for the two parties to come to an agreement before further legal action's taken. Let's hope that these two can work things out, otherwise we could see significant disruption across the tech world.

Arm is reportedly cancelling Qualcomm's chip licence but it probably won't stop Snapdragon X 'AI' PCs from being made

Arm has finally thrown its toys and given 60 days notice that it intends to cancel Qualcomm's licence to produce chips based on Arm technology. So says Bloomberg, which claims to have seen Arm documents detailing the move. This dispute has been running for a while, but the consequences of such a cancellation, if true, are potentially catastrophic for Qualcomm. The most immediate impact would involve Qualcomm's new Snapdragon X chips for PC laptops. In theory, if the licence was cancelled, Qualcomm would have to stop making the Snapdragon X and the whole Windows-on-Arm AI PC thing, which is only just getting going, would implode. That's because the licence cancellation is thought to pertain specifically to Qualcomm chips with custom core designs that use the Arm ISA or instruction set architecture. The Snapdragon X is just such a chip design with bespoke CPU cores designed in-house at Qualcomm. To be really accurate, the Snapdragon X's cores were designed at a startup called Nuvia, which Qualcomm acquired in 2021. But the overarching point is that there are two ways to build an Arm-based chip. One is to licence the Arm ISA and design your own compatible cores, the other is to buy ready-made core designs from Arm. It's the former that Qualcomm has done with Snapdragon X, so the licence cancellation would apply to custom CPU designs, but not to other Qualcomm chips based on Arm CPU core designs. In other words, the cancellation wouldn't mean that Qualcomm couldn't produce any Arm chips at all, just Arm chips with its own in-house CPU core designs. In fact, even more specifically than that, the cancellation wouldn't stop Qualcomm from making its custom design chips for phones, for which it reportedly has a separate licence. So, the dispute appears to be narrowly limited to the Snapdragon X for PCs and laptops. The whole mess can be traced back to the fact that Nuvia originally acquired a licence to produce custom Arm cores aimed at servers and enterprise applications. Arm's beef is that Qualcomm is now using that licence to make chips clearly targeted at laptops and client PCs. And guess what? A server licence is cheaper than a client licence. At least, that's the prevailing narrative around a dispute that's yet to fully enter the public domain. So, what will actually happen? The only certainty is that a whole lot of lawyers will get substantially richer on the back of this fracas. But it's probably not actually hugely likely that Qualcomm will be forced to stop making its Snapdragon X chips. Instead, it's more a question of whether Qualcomm will have to cough up to keep making Snapdragon X and if so... how much? It's extremely unlikely that Arm really wants Qualcomm to ditch Snapdragon X. It just wants more licensing fees. Equally, Qualcomm probably has too much invested in all this to simply walk away. So, its aim will surely be to fight to minimise any fees or penalties while it keeps on making Snapdragon X chips. If it has to eventually pay out, so be it. Indeed, the most likely outcome of all is that this thing will drag out in the courts for years to come, eventually some or other settlement will be announced, by which point we'll all barely remember how and when it all started. What impact any of this will have on the PC's possible shift from Intel and AMD x86 CPUs to Arm chips is pretty hard to say. Even without this Arm-versus-Qualcomm tussle, the reality of a compelling Arm-powered gaming PC was likely many years away. Given Qualcomm is currently the main protagonist pushing Arm on the PC, this lumbering legal battle hardly seems likely to speed things along.

Qualcomm's Legal Woes Threaten the Windows on ARM Rollout

Arm Holdings is terminating Qualcomm's license to utilize ARM intellectual property. This action, which will be finalized in 60 days, could scrub Qualcomm's latest Snapdragon X Elite desktop chipsets from the market and derail the company's upcoming Snapdragon 8 Elite platform. ✕ Remove Ads Many people feel that Qualcomm and the ARM architecture are inseparable. It's hard to talk about one without talking about the other. Yet Qualcomm and Arm Holdings -- the company behind the ARM ISA -- are not in good standing. They're set to appear in court this December for breach of contract and trademark infringement. The legal battle between these parties began during Qualcomm's 2021 acquisition of Nuvia, a datacenter-grade chipset designer that was licensed to design custom ARM cores and modify Arm Holdings' intellectual property. Arm Holdings argues that the licenses held by Nuvia are non-transferrable and must be renegotiated or dissolved, while Qualcomm insists that the opposite is true. ✕ Remove Ads Defiantly, and perhaps foolishly, Qualcomm developed an Oryon CPU core that could infringe on these contested licenses. And the Oryon isn't just some obscure piece of technology -- it's Qualcomm's entryway to the PC market. Snapdragon X Elite chipsets that utilize the Oryon design are at the center of Microsoft's Windows on ARM rolloutand Copilot+ AI marketing scheme. Investors and PC brands are salivating over this disruptive venture. The industry is tangled up in Qualcomm's gamble. In other words, the timing of this license termination is impeccable. Qualcomm now faces intense pressure from investors and partner brands who are keen to cash in on the innovative, disruptive Snapdragon X Elite platform. The license termination notice has also interrupted Qualcomm's annual Snapdragon Summit, potentially eroding any market gains that Qualcomm made when announcing the Oryon-based Snapdragon 8 Elite mobile chipset. Qualcomm's stock price dropped 5.13% on the morning of October 23rd, and some analysts reduced their price target for the asset after Bloomberg broke news of the license termination. ✕ Remove Ads Note that Arm Holdings and Qualcomm have not published a copy of the licensing termination notice. We don't know when it was sent to Qualcomm, so we don't know when the 60-day waiting period will come to an end. That said, Arm Holdings wants to renegotiate the disputed licenses -- it wants more money from Qualcomm, and it wants a speedy trial, too. We can assume, at least for now, that the license termination falls sometime in December during the companies' court appearance. To reiterate, the soon-to-be terminated licenses only pertain to chipsets that utilize Arm Holdings IP. Termination could prevent Qualcomm from manufacturing or selling Snapdragon Elite-series chipsets, assuming that Qualcomm actually complies with the decision. This could disrupt the flow of Windows on ARM laptops and delay some upcoming Android phones, though Qualcomm would still be allowed to build and sell ARM-based processors that are not based on Arm Holdings' intellectual property. ✕ Remove Ads Source: Bloomberg

ARM and Qualcomm are playing dice with the future of Windows laptops

It's no secret that 2024's batch of AI PCs owes much of their success to the excellent batch of Qualcomm Snapdragon chips, which has the best version of Windows Arm running as the OS. However, a nasty split between the two could jeopardize everything, especially for consumers. According to a breaking news report from Bloomberg, Arm canceled a "license that allowed longtime partner Qualcomm Inc. to use Arm intellectual property to design chips." The company issued Qualcomm a 60-day notice of the cancellation of said license as required by law. The report stated that the split was caused by a breach of contract back in 2022, which escalated a legal dispute over vital smartphone technology. Qualcomm responded in a statement, writing that Arm is trying to interfere with its CPUs and increase its royalty rates and that its claims are "baseless." This news comes as Qualcomm announced new automotive and mobile chips at the yearly Snapdragon Summit in Hawaii, and in the same year, the brand Qualcomm Snapdragon Elite chips launched with the latest batch of AI laptops. But this legal battle isn't just a lovers' quarrel between those major tech companies; it could have widespread ramifications for consumer tech at large. Windows laptops like the Microsoft Surface Laptop 7 received massive rejuvenation through the Snapdragon Elite, which is made from tech provided by Arm. This chip took one of the most inconsistently performing laptop lines and turned it into an absolute powerhouse in terms of performance and battery life. Further, its Windows Arm operating system, while still not at the level of Windows 11, has improved by leaps and bounds to the point where it's near perfect for productivity work and reasonably competent for creative work and gaming. Arm and Qualcomm are also vital as they've generated competition with Intel, AMD, and Microsoft in the AI PC and OS market. This has given consumers more variety while also keeping laptop prices more affordable than their competitors. If it can continue to gain momentum in the market, both the chips and OS could become a true threat to the big dogs as the tech behind them is refined. While it's impossible to know the full story behind this legal matter, Qualcomm's statement in response and relevant Arms-related news suggest possible hints. Qualcomm stated, "This is more of the same from ARM -- more unfounded threats designed to strong-arm a longtime partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights under our architecture license." According to Qualcomm, Arm is trying to acquire more money from the former by forcing an increase in royalty rates. This also coincides with the news that Intel sold its 1.18 million-share stake in Arm back in August 2024. While it's considered unlikely that the sale was attributed to any issues with Arm (it's more related to streamlining operations amidst financial trouble), it's still a possibility that there could have been something involving Arm's finances. Otherwise, it should be a valuable asset worth keeping hold of. Regardless of the reason, this legal dispute is akin to playing dice with the future of Windows laptops. What once seemed like a brighter future for laptops could stand to crumble if this ends with the permanent split between two tech companies that together have been successfully challenging the industry giants.

How Qualcomm's feud with Arm could be a major blow to Copilot+ laptops

Qualcomm CEO Cristiano Amon showing off the Snapdragon X Copilot+ launch lineup at Computex Taipei 2024 (Image credit: Future) The future of Copilot+ PCs is murkier than ever, as the legal battle between Qualcomm and chip architecture firm Arm continues to simmer. In a recent escalation of the ongoing legal dispute Arm Holdings, has issued a 60-day cancellation notice for Qualcomm's license to build and sell chipsets with ARM architecture. The legal entanglement has created a sticky situation for Qualcomm in particular. While Qualcomm manufactures the Snapdragon chips, those processors are built off Arm's technology. That means fallout from the lawsuit could theoretically halt Qualcomm's laptop, smartphone, and automotive chip-making business. And if Qualcomm's chipmaking business gets shut down, what does that mean for the Copilot+ program? Qualcomm has had a successful partnership with Arm Holdings since 2006, to use the ARM (Advanced RISC Machine) architecture to build smartphone processors. Arm Holdings also licenses its technology to Apple for the M-series processors. Nvidia and AMD also have licenses to build chips based on Arm technology. In 2019 a group of ex-Apple and Google engineers headed by John Bruno, Manu Gulati, and Gerard Williams III founded a hardware company called Nuvia. Arm Holdings and Nuvia had a contract to build SoC (system on a chip) processors for servers. In 2021, Qualcomm acquired Nuvia and reassigned the team to develop a laptop processor which eventually became the Snapdragon X Elite and X Plus chipsets. When Qualcomm acquired Nuvia in 2021, Arm Holdings canceled the chip licenses Nuvia held before the merger. So in 2022, Arm Holdings sued Qualcomm for failing to negotiate a new license for the Snapdragon X processors, as Arm alleges the laptop chips are a direct descendant of the server processors Nuvia had been building using its now-canceled license. Essentially, Arm argues that these chips constitute a breach of contract and trademark infringement. Qualcomm is arguing that its existing license is broad enough to cover the Snapdragon X chipsets without renegotiating a new contract with Arm. A new report from Bloomberg's Ian King indicates that Arm has escalated the legal battle by canceling Qualcomm's license. Arm has given Qualcomm a 60-day notice to end manufacturing and sales of all chips based on Arm's technology. Qualcomm's entire chip portfolio currently uses technology licensed by Arm Holdings, including Qualcomm's Snapdragon smartphone processors which power most Android phones. While Samsung has its own proprietary Exynos processor, Samsung's flagship smartphones like the Galaxy S24 Ultra often use the more powerful Qualcomm Snapdragon 8 chipset. Google uses the Tensor processors for the Pixel line, and MediaTek has recently released the Dimensity 9300+ smartphone chip. So, while the Android market won't be bereft of chipset options if Qualcomm and Arm's relationship fails, smartphone manufacturers will be in some serious trouble. On the automotive side, Qualcomm also sells Snapdragon chips to various car brands including BMW, Honda, Hyundai, Mercedes-Benz, Volkswagen, and Volvo. As for laptops, Qualcomm released the Snapdragon X Elite chips in June of this year. These were the inaugural Copilot+ AI PCs. Qualcomm has released more processors in the Snapdragon X family, including the new Snapdragon X Plus 8-core processors. Qualcomm reportedly has the Snapdragon X2 Elite processor in testing. Should the Qualcomm and Arm feud continue to escalate, Qualcomm will not be able to sell any of its smartphone and laptop processors or continue working on the second generation of Snapdragon X chips. This tense legal battle between Qualcomm and Arm has fueled rumors that Qualcomm plans to buy Intel. After all, if Qualcomm can no longer make ARM processors, the next option is to use x86 architecture which is the basis of Intel's chips like the recent Intel Core Ultra 200V. It's ironic, given that Qualcomm CEO Cristiano Amon spent a large chunk of his Snapdragon Summit Day 1 keynote dunking on Intel's latest processors. Of course, driving down Intel stock prices could make an acquisition easier for Qualcomm. And buying a company that specializes in x86 architecture is a surefire way of mitigating the fallout from the legal battle with Arm Holdings. But despite all of the chatter, it doesn't seem a Qualcomm takeover of Intel is really in the cards. Intel's business may not be booming, but there isn't a huge valuation gap between the two companies making an acquisition difficult. Additionally, Qualcomm's own stock is currently dropping after Arm delivered its license cancellation notice. Ultimately, Qualcomm's future looks bleak if the legal battle with Arm isn't resolved in the next 60 days. Microsoft launched the Copilot+ program exclusively on Qualcomm Snapdragon laptops. While AI PCs bearing AMD's Ryzen AI 300 series and Intel's Core Ultra 200V series chipsets will become Copilot+ PCs, the death of the Qualcomm Snapdragon X platform will still have consequences for the entire program. After all, Microsoft put the Snapdragon X chipsets in the Surface Pro 11 and Surface Laptop 7 as launch units for the Copilot+ program. A Surface Laptop 7 powered by Intel's Core Ultra 200V "Lunar Lake" series processors has already leaked, but the laptop has yet to hit the shelves. So if Qualcomm's relationship with Arm is severed, Copilot+ will have no available laptops or tablets until the AMD and Intel laptops get added to the program. Copilot+ AI is also hardly a selling point for the platform, as the features aren't particularly unique or interesting. So if the inaugural Copilot+ laptops are de-listed, there will be no real reason to continue the program. Intel already has its own AI Playground software with similar AI tools, and AMD has a Ryzen AI software stack that allows for easy porting of TensorFlow and PyTorch models to Ryzen AI laptops. While both the Intel Core Ultra 200V and AMD Ryzen AI 300 series processors will hit Microsoft's Copilot+ NPU TOPS requirements, Copilot+ will be a program searching for a cause without the Qualcomm Snapdragon chipsets. Qualcomm and Arm Holdings falling out would ultimately be pretty bad for both companies. Qualcomm needs that ARM license to continue selling chips for laptops, cars, and phones. Arm Holdings will lose a decent chunk of revenue if Qualcomm's business shuts down. Destroying the partnership is a poor financial decision on both sides. So the likelihood of Arm enforcing the license cancellation is low, and the tactic is likely intended to push for a settlement out of court. The Arm Holdings v Qualcomm lawsuit goes to trial in December, which lines up with the 60-day cancellation deadline. If the companies settle, little would likely change for the AI PC business and the Copilot+ program. While there will likely be some consequences from the settlement, those will probably impact Qualcomm and not the AI PC business as a whole. If the companies are unable to settle out of court, the next year will be very difficult for Qualcomm and Microsoft as the legal battle drags on in the US court system.