Financial Association News October 23 (Editor Zhou Ziyi) According to media reports on Tuesday (October 22), citing a document, the UK chip design company Arm plans to cancel the long-term partnership agreement with Qualcomm to use Arm's intellectual property to design chips.

Previously, Arm had signed an architecture license agreement with Qualcomm, allowing Qualcomm to use the intellectual property of this British company to design its own chips.

According to a latest document, Arm informed Qualcomm 60 days in advance of its plan to cancel the architecture license agreement.

At the time of this announcement, the two tech giants are engaged in a legal battle, expected to officially start in December this year at the federal court in Delaware.

Legal dispute

In 2022, this British company, majority owned by SoftBank Group of Japan, sued Qualcomm because Qualcomm failed to renegotiate a new license with Arm after acquiring another company holding an Arm license.

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

Arm believes that after Qualcomm's acquisition of Nuvia, it failed to renegotiate the post-merger contract terms with Arm, which Arm claims violates Qualcomm's license and demands Qualcomm to destroy the chip designs created by Nuvia before the acquisition.

According to the lawsuit filed by Arm in the Delaware State Court, these designs cannot be transferred to Qualcomm without permission. However, Qualcomm believes that its existing agreements cover the activities before Nuvia's acquisition.

Before this dispute, the two companies were close partners, jointly driving the development of the smart phone industry. However, now they are on the verge of a breakup.

If Arm terminates the license, Qualcomm will be unable to use Arm's instruction set for its own designs. While Qualcomm can still authorize the use of Arm's design blueprints under separate product agreements, this approach would cause delays in new product designs and render the work already done by Qualcomm completely wasted.

However, Qualcomm is not particularly worried because the company has always had the idea of breaking away from the Arm architecture. On October 21, Qualcomm announced the flagship mobile platform Snapdragon 8Elite at the 2024 Snapdragon Summit, featuring the second-generation custom Qualcomm Oryon CPU, Qualcomm Adreno GPU, and enhanced Qualcomm Hexagon NPU.

Qualcomm's Senior Vice President and General Manager of the Mobile Business, Christoper Patrick, stated at the summit that Qualcomm's self-developed architecture Oryon "completes the final piece of our entire SoC (system-on-chip)," and referred to smartphone chips under the self-developed architecture as an "industry turning point".