In 2021, Qualcomm bought the start-up Nuvia for $1.4 billion. Nuvia had an ARM license to develop server chips, but Qualcomm redirected those technologies toward designing laptop processors. ARM considers this reassignment a violation of the original licensing agreement and has taken the matter to court in 2022. The start of the trial between ARM and Qualcomm opens this Monday, with considerable stakes for the entire industry.
The heart of the dispute lies in the interpretation of the licensing agreements. ARM claims that Qualcomm should have renegotiated terms after acquiring Nuvia because financial terms differed between the two companies. Qualcomm, for its part, maintains that its existing license with ARM is sufficient and accuses its opponent of overstepping its rights.
The relationship between the two companies is complex: Qualcomm pays around $300 million annually in royalties to ARM. The outcome of the trial could jeopardize Qualcomm’s revenues, estimated at $39 billion. More than just a legal battle, it is the future of the global technological ecosystem that is at stake.
Repercussions on the entire technology industry
Indeed, this conflict directly threatens the global supply chain of smartphones and computers. Major manufacturers like Samsung, Xiaomi, Honor, Microsoft and others depend on Qualcomm’s Snapdragon chips. ARM does not seek financial damages but demands the destruction of all products using its intellectual property without appropriate licensing.
In October 2024, ARM even hardened its position by threatening to revoke Qualcomm’s license within 60 days. Qualcomm responded by calling the action “desperate ploy”. And to accuse ARM of anti-competitive behavior.
This legal battle comes at a particularly important time for the technology industry. The new laptops equipped with AI-optimized Qualcomm chips, based on Nuvia’s work, could see their marketing compromised. Microsoft, which is banking heavily on these processors for its next generation of Windows computers, is observing the situation with concern.
Furthermore, analysts point out that this trial could have major implications for intellectual property licensing agreementsmergers and acquisitions and contract law in the technology sector. Some experts, like Stacy Rasgon of Bernstein Research, suggest that an out-of-court settlement would be in the best interests of both sides, given their historical interdependence. The outcome of this trial, which will be held until this Friday, is therefore eagerly awaited by the entire industry. 2025 may not be the year we expected.
- A crucial trial pits ARM against Qualcomm over the use of licenses following the purchase of Nuvia for $1.4 billion
- The stakes are colossal: $39 billion in revenue for Qualcomm is at stake
- The outcome could upend the entire tech industry, from smartphones to computers, and redefine the rules of licensing deals in the sector
