ARM vs. Qualcomm: The trial has begun
ARM wants higher license fees from Qualcomm; Qualcomm does not want to pay. The dispute has now ended up in court.
A notebook with a Snapdragon X processor that uses Nuvia technology.
(Image: c't / mue)
The closely allied business partners ARM and Qualcomm are taking their license dispute to court. The dispute has been simmering since Qualcomm's acquisition of processor start-up Nuvia in 2021 because ARM believes it is at a disadvantage. The first court hearing took place on Monday at the US Federal Court in Delaware (case number 1:22-cv-01146). In the course of the trial, both sides will try to convince the jury of their side of the story.
ARM argues that Qualcomm is using the CPU cores developed by Nuvia with ARM architecture in its own processor designs such as Snapdragon X without permission. Nuvia's license provided for significantly higher royalties per chip produced – would not have been a problem for the server processors designed by Nuvia due to their higher margins. However, Qualcomm only pays the lower royalties under its own agreement.
Nuvia was apparently ARM's great hope of expanding its own market share in servers against AMD's and Intel's x86 competition. However, Qualcomm first ported the core design to notebook processors and then to smartphone chips –, arguing that its own license would also cover custom cores.
The parties involved have been unable to reach an agreement for two years. The conflict went so far that ARM withdrew Qualcomm's license and publicly demanded the destruction of all processors with Nuvia technology as a means of exerting pressure.
Low amount in dispute
The amount in dispute is comparatively low: according to internal documents presented to the jury, ARM's loss of revenue amounts to 50 million US dollars.
This is a pittance, especially for Qualcomm. The company turned over just under 39 billion US dollars in the last financial year and made a profit of just over 10.1 billion US dollars. For ARM, such amounts are more important: in the last financial year, the company made a profit of 306 million US dollars on a turnover of just over 3.2 billion. Business with Qualcomm is said to account for around 10 percent of ARM's annual turnover.
ARM has been trying for years to expand its own sources of revenue, especially by opening up new markets for ARM chips.
Potential distortion of competition
So far there is no transcript of the first day of negotiations. However, the US news agency Reuters reports from the court. According to the transcript, both sides primarily questioned ARM CEO Rene Haas.
Qualcomm's legal team presented evidence that ARM wanted to design and manufacture its own chips. Qualcomm and other licensees would then be at a disadvantage. The indirect accusation: distortion of competition. Haas replied that ARM has not manufactured any chips and has never entered the business, but that as CEO he always considers various possible strategies.
ARM is also said to have told dozens of Qualcomm customers that the legal dispute could result in the destruction of the Nuvia processors, which has caused uncertainty. Haas believes he is in the right because many partners and customers have made enquiries.
Swift verdict expected
The court hearing will continue over the next few days. The jury is expected to deliberate on the verdict from Thursday.
Meanwhile, it is clear from the court documents that Qualcomm will continue as before for the time being. According to the documents, the company is already working on a new generation of processors with Nuvia technology at ARMv9 level – The current cores are only capable of ARMv8 without the new vector units.
A side note: Apple and Ampere Computing are also represented by lawyers in court as spectators. Apple has requested in court that its own license agreement with ARM be kept secret.
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(mma)
