Another 'Chip War' Incoming? Arm Reportedly to Revoke Qualcomm's Chip Design License Amid Legal Dispute

According to a report cited by a document on Tuesday (October 22nd), chip design company Arm is planning to cancel the license that allows long-term partner Qualcomm to use Arm's intellectual property to design chips.

Previously, Arm had signed an architectural licensing agreement with Qualcomm, permitting the US company to use the British firm's intellectual property to design its own chips. However, according to the latest document, Arm has given Qualcomm a 60-day notice of its intention to cancel the architectural licensing agreement.

This news comes amidst an ongoing legal battle between the two tech giants, which is expected to officially commence in the Federal Court in Delaware in December this year.

In 2022, the UK company, majority-owned by the Japanese SoftBank Group, sued Qualcomm for failing to renegotiate a new license after it acquired another company holding an Arm license.

The lawsuit stems from Qualcomm's acquisition of a chip design startup called Nuvia. Nuvia, founded by Apple chip engineers, was sold to Qualcomm in 2021 for $1.4 billion, and it also held an Arm architecture license before its acquisition.

Arm argues that Qualcomm failed to renegotiate the merged contract terms with it after acquiring Nuvia. Arm claims this violated the license granted to Qualcomm and has demanded that Qualcomm destroy the chip designs created by Nuvia before the acquisition.

According to the lawsuit filed by Arm with the United States District Court for the District of Delaware, these designs cannot be transferred to Qualcomm without permission. However, Qualcomm maintains that its existing agreement covers Nuvia's previous activities.

Prior to this dispute, the two companies had been close partners, jointly driving the development of the smartphone industry. Yet now, they seem to be on the brink of parting ways.

If Arm terminates the license, Qualcomm would no longer be able to use Arm's instruction set for its own designs. Although Qualcomm could still use Arm's design blueprints under separate product agreements, this would cause delays in the development of new products and force Qualcomm to waste work that has already been completed.

However, Qualcomm is not particularly panicked, as the company has always had the idea of getting rid of Arm's architecture. On October 21st, at the Snapdragon Summit 2024, Qualcomm unveiled its flagship mobile platform, the Snapdragon 8 Elite, which features the second-generation custom Qualcomm Oryon CPU, Qualcomm Adreno GPU, and the enhanced Qualcomm Hexagon NPU.

Christopher Patrick, Senior Vice President and General Manager of Qualcomm's mobile business, also stated at the summit that Qualcomm's self-developed Oryon architecture would complete the last piece of the puzzle for their entire SoC (System on a Chip), and become an industry turning point.