Arm threatens Qualcomm with deprivation of license to develop processors

According to the British Arm holding, in 2022, the American processor developer Qualcomm violated the terms of the agreement under which it received the right to use the Arm architecture. Now the British company is giving Qualcomm eight weeks to eliminate the violations, otherwise the latter may lose its license to develop Arm-compatible chips.

Image source: Qualcomm

Qualcomm sells hundreds of millions of processors annually, they determine a significant part of its revenue, which reaches $39 billion, so possible interruptions with the use of Arm licenses could seriously harm the business of the American developer. Representatives of the latter said that Arm is trying to forcefully solve the problem that arose in 2022, neglecting the interests of its long-term partner. Qualcomm considers Arm’s threats to revoke its licenses to be completely unfounded. Qualcomm’s rights in the dispute with Arm will be protected, as representatives of the first company are convinced.

The history of the conflict between long-time partners goes back to 2021, when Qualcomm acquired another processor developer, Nuvia. The terms of the deal, according to Arm representatives, violated the contract with this developer of processor architectures, since after purchasing Nuvia, Qualcomm should have reconsidered the terms of this contract. It was people from Nuvia who developed the Oryon architecture, which underlies the most modern Qualcomm processors, used not only in laptops, but also in smartphones. At least, the Snapdragon 8 Elite presented yesterday definitely belongs to them.

According to Arm representatives, Qualcomm does not have the right to use Nuvia’s developments, since Arm itself revoked the latter’s licenses in February 2023. This prevents Qualcomm from continuing to sell processors using architectures developed by Nuvia prior to the Qualcomm deal, according to Arm. If the British developer deprives Qualcomm of licenses for the development of processors, then the latter will have to draw up a separate agreement for the right to release each of the developed processor models. This will increase Qualcomm’s time and expense.

Arm’s current leadership is pushing customers to use off-the-shelf architectures, while Qualcomm is trying to gain a competitive advantage by using customized designs. At the same time, at this stage of development, Qualcomm is still heavily dependent on Arm, and the companies will not be able to do without each other.