Qualcomm v Arm: The bizarro quotient just went off the scale


Qualcomm and Arm have been engaged in one of those very entertainingly bitter court fist-fights that the industry throws up when friends fall out over money. Briefly, Qualcomm builds its mobile device chips around Arm, for which it pays Arm a lot of money. Qualcomm bought another Arm-licensed company, Nuvia, and inherited Nuvia’s own Arm deals and derived IP. Arm said ‘Nu-uh, can’t do that.’ And into court they tumbled.

This sort of thing is normally lawyers locking horns over profit. Sometimes, though, it feels more like a fight to the death – and in this case, Qualcomm is making the case that a lot more than the details of per-chip licensing costs are involved. It says that Arm is about to make huge changes to its business model, imposing savage new restrictions on how its IP is used and making all its money from device makers, not chip companies. Which would cut Qualcomm off at the knees, if true.


The move to license device makers instead of chip makers would be massively complicated for everyone, and would give Arm much more power by not having to negotiate with a few very large concerns but a much more diverse market with many smaller clients. Doubtless the market regulators would be very interested in that, but it’s not quite world-beating suicidal madness.

World-beating suicidal madness comes with the other idea – that Arm would refuse to license a design that didn’t use purely Arm intellectual property. You want a GPU design to go with the CPU? Arm. An AI accelerator? Arm or nothing.

The chip industry has always had a fondness for these sorts of shenanigans, but has known better than to write them down. You want a particular CPU? Terribly sorry, but there’s a really long lead time on that part – unless you also buy the rest of our support chips… then we can do business. It’s unethical, usually illegal, and even the biggest names look the other way when their sales teams do it.


Source: Qualcomm v Arm: The bizarro quotient just went off the scale • The Register

[…] Qualcomm’s amended response to Arm’s lawsuit against the US chip giant. Arm is right now trying to stop Qualcomm from developing custom Arm-compatible processors using CPU core designs Qualcomm obtained via its acquisition of Nuvia. According to Arm, Qualcomm should have got, and failed to get, Arm’s permission to absorb Nuvia’s technologies, which were derived from Arm-licensed IP.

Qualcomm counterclaimed that Arm tried to demand at least “tens of millions” of dollars in transfer fees and extra royalties for using the newly acquired Nuvia designs.


Qualcomm states in its filing [PDF] that Arm has signaled it “will no longer license CPU technology to semiconductor companies” once existing agreements expire.

This would be an incredible transformation for Softbank-owned Arm: how exactly would Arm-based chips get into devices if no more Arm technology licenses are issued to chip designers … unless, perhaps, Arm starts making its own chips, which it’s previously said it has no appetite for, or it gets certain chip designers to make pure Arm-designed processors for it, and the makers of the end products using these components get charged a royalty per device.

In response to Qualcomm’s filing, Arm’s veep of external communication Phil Hughes didn’t directly address the allegations about licensing changes, but said the filing is “riddled with inaccuracies, and we will address many of these in our formal legal response that is due in the coming weeks.”


Thus, Qualcomm is claiming a whole range of manufacturers – from those in the embedded electronics space to personal computing – using Arm-compatible chips may need to directly pay Arm a royalty for every device sold. And if they don’t, they’ll need to shop elsewhere for a system-on-chip architecture, which could be unfortunate for them because Arm has few rivals. In fields like smartphones, few alternatives exist. Ironically, Qualcomm acquired Nuvia to make itself a better alternative to Intel and AMD in laptops.


The language in Qualcomm’s filing is specific and nuanced. It talks of threats by Arm, and Arm indicating it intends to do certain things. At first read, Qualcomm’s filing appears to state outright that Arm will change its business model; on second read, it appears more that Qualcomm is claiming Arm is threatening it will overhaul its licensing approach – to the detriment of Qualcomm – so as to scare Qualcomm into agreeing to Arm’s terms regarding the Nuvia acquisition and its licensed technologies.

Qualcomm previously complained Arm is trying to steer it onto higher royalty rates, by making it renegotiate its licensing agreements following the acquisition of Nuvia and its Arm-derived technologies.

Meanwhile, no matter how unfair Qualcomm believes Arm has acted, Qualcomm still has to answer Arm’s initial complaint: that Qualcomm transferred Nuvia’s Arm license and Arm-derived technology to itself after the acquisition, whereas the fine print of Nuvia’s agreement with Arm is that any such transfer must be negotiated with Arm, and that Qualcomm allegedly failed to do so and is in breach of contract.

Qualcomm says this assertion is simply wrong.

Whatever happens, this case has the potential to shine a light into some dark corners of the semiconductor industry – and this filing suggests whatever we find down there will be fascinating

Source: Qualcomm: Arm threatens to end CPU licensing, charge device makers instead

Robin Edgar

Organisational Structures | Technology and Science | Military, IT and Lifestyle consultancy | Social, Broadcast & Cross Media | Flying aircraft

 robin@edgarbv.com  https://www.edgarbv.com