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."

Meanwhile, an Arm spokesperson told us: "Following Qualcomm’s repeated material breaches of Arm’s license agreement, Arm is left with no choice but to take formal action requiring Qualcomm to remedy its breach or face termination of the agreement. This is necessary to protect the unparalleled ecosystem that Arm and its highly valued partners have built over more than 30 years. Arm is fully prepared for the trial in December and remains confident that the Court will find in Arm’s favor."

Update, October 23, 2024, 11:33PM ET: This story has been updated to add Arm's statement.