Qualcomm may lose licence to design its own chips on Arm standards

The cancellation escalates a legal dispute between two major companies that helped advance the smartphone industry

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Arm has accused Qualcomm for failing to renegotiate contract terms after acquiring chip design start-up Nuvia in 2021. Photo: Reuters

Published: 10:30am, 23 Oct 2024

Arm Holdings is cancelling a licence that allowed long-time 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 licence 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 most Android smartphones. If the cancellation takes effect, the company might have to stop selling products that account for much of its roughly US$39 billion in revenue, or face claims for massive damages.

Arm, based in Cambridge, England, has created much of the underlying technology for mobile electronics. Photo: AFP

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.