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The feud between chip and architect designer Arm Holdings and chipmaker Qualcomm has escalated with the termination of a major deal.
Bloomberg and other media outlets reported on Oct. 23 that the UK-based Arm has given the latter company 60 days’ notice that it will be terminating Qualcomm’s architectural license agreement. If the cancellation goes through, Qualcomm will lose the rights to manufacture CPUs that rely on the ARM instruction set.
According to Bloomberg, without the agreement, Qualcomm would likely face “claims for massive damages” if it continued to manufacture products utilizing Arm designs. Those products reportedly account for much of Qualcomm’s $39 billion in annual revenue.
The notice of cancellation appears to be a sort of nuclear option in an ongoing legal battle between the two firms, Bloomberg reported.
In 2021, Qualcomm acquired chip-design startup Nuvia as part of a strategy to shore up its CPU design business (and gain on competitors Intel, AMD, and Apple). Arm filed a lawsuit the next year claiming the purchase violated the architectural license agreement, and demanding Qualcomm destroy any designs Nuvia engineers produced prior to the acquisition.
As Ars Technica observed, “that apparently didn’t happen”—Qualcomm has continued to ship its Oryon CPU cores, which began as a pre-acquisition Nuvia project, to power new lines of Snapdragon processors used in cell phones, Surface tablets, and Windows PCs. Previously, Qualcomm had used a CPU architecture called Kryo that derived from Arm Cortex CPU cores. Arm has argued the production of Oryon cores is not covered by Qualcomm’s license.
In a statement shared with IT Brew, Arm VP of External Communications Phil Hughes wrote that Qualcomm’s “repeated material breaches of Arm’s license agreement” left it “no choice” but to seek remedies or terminate the agreement.
“This is necessary to protect the unparalleled ecosystem that Arm and its highly valued partners have built over more than 30 years,” Hughes added.
“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,” Brandon Cheung, a Qualcomm manager of policy and legal communications, wrote in a statement to IT Brew.
Cheung added the threat was a “desperate ploy” to disrupt the legal process ahead of court proceedings in the original lawsuit and that “Arm’s anticompetitive conduct will not be tolerated.”
Before the bad blood started, Arm and Qualcomm were key partners. The deterioration of the relationship sometimes draws comparison to the Apple–Intel breakup, in which Apple stopped using Intel CPUs in favor of in-house chips.
However, Qualcomm does not seem placed to cut ties with Arm at this time. The termination of the license, even if temporary, would almost certainly undermine its growing momentum in the Windows laptop market.