Arm gives up on killing off Qualcomm's vital chip license
- Reference: 1738823355
- News link: https://www.theregister.co.uk/2025/02/06/arm_qualcomm_nuvia/
- Source link:
The Brit biz had sought to end that license in a lawsuit it brought against Qualcomm in 2022. That suit is rooted in Qualcomm's 2021 [1]acquisition of a startup called Nuvia, which was co-founded by the brains behind Apple's custom processors and had signed an architecture license agreement (ALA) with Arm that allowed it to design its own Arm-compatible CPU cores.
Nuvia produced CPU blueprints so fine that Qualcomm, also an Arm ALA licensee, decided to buy the company and use the upstart's custom core designs in future Snapdragon system-on-chips. Those CPU designs were marketed by Qualcomm under its Oryon brand.
[2]
Arm didn’t like any of that for an array of reasons – one being that, [3]in Arm's mind , Nuvia wasn't allowed to transfer its Arm-derived designs to Qualcomm without Arm's prior approval – and claimed in its lawsuit that Nuvia and Qualcomm were in breach of their agreements with Arm. The Softbank-owned biz went as far as seeking to end its ALA with Qualcomm – which would leave Qualy unable to develop or ship chips relevant to that license – and demanded the destruction of Nuvia CPU blueprints as well as compensation.
[4]
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The matter wound up in court last year and a jury largely [6]found in Qualcomm’s favor .
On Wednesday, Qualcomm’s latest [7]quarterly financial report [PDF] revealed Arm had indicated on January 8, 2025 it was no longer seeking to kill off Qualcomm's ALA.
[8]
During Qualcomm’s Q1 2025 earnings conference call with Wall Street, CEO Cristiano Amon confirmed Arm “has no current plan to terminate the Qualcomm Architecture License Agreement. We're excited to continue to develop performance leading, world-class products that benefit consumers worldwide that include our incredible Oryon custom CPUs.”
Oryon features in the Snapdragon X Series and Snapdragon 8 Elite SoCs that respectively power PCs and high-end smartphones. Both products have won plaudits. The Snapdragon X Series were [9]at one point the only processors Microsoft had certified for powering AI-crammed Windows Copilot+ PCs. Samsung will use only the 8 Elite in its flagship [10]Galaxy S25 smartphones, after previous models shipped with either Qualcomm or its own Exynos parts.
On the other side of the fence, Arm noted in a [11]regulatory filing [PDF] that post-trial motions had been filed on both sides to clarify the legal situation following the jury's verdicts, and a new trial may be sought.
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On its own latest quarterly earnings call, which like Qualcomm’s took place on Wednesday, Arm’s CFO Jason Child was asked about the impact of the case. He said Arm’s revenue forecasts assumed the biz was "not going to prevail in that lawsuit," and that it expected to continue receiving payments from Qualcomm, which licenses various technologies from Arm and doesn't just hold an ALA.
“The primary reason for the lawsuit very much was around defending our IP and that's important," Child said. "But from a financial perspective, we had assumed that we'll continue to be receiving royalties at basically the same rates that they've been paying for in the past and will continue to pay."
[13]Want Intel in your Surface? That’ll be $400 extra, says Microsoft
[14]Qualcomm big cheese Cristiano Amon's pay award jumps 10%
[15]Where does Microsoft's NPU obsession leave Nvidia's AI PC ambitions?
[16]Intel’s datacenter architecture boss and Xeon lead jumps to Qualcomm
Qualcomm continues to pursue another case against Arm, alleging the UK outfit didn’t honor some of its contractual obligations. Arm reckons that matter will reach the courts in the first half of 2026.
Now let’s talk money and AI
Qualcomm’s [17]latest financial figures , which cover the three months to December 29, 2024, record $11.7 billion in revenue, an 18 percent year-on-year jump. Net income grew 15 percent to reach $3.18 billion. $10.1 billion of revenue came from chip sales, the first time Qualcomm topped $10 billion in a single quarter.
Arm’s [18]revenue for the three months to December 31, 2024 grew 18 percent year-on-year to reach $983 million. Net income was $252 million, topping the result from the same quarter last year by $28 million (Arm’s net income bounces around a lot).
On their earnings calls, both companies were asked the question of the moment: Will DeepSeek’s apparently [19]meager appetite for compute power be bad for business?
Neither is troubled.
Qualcomm's big cheese was excited by the availability of small-but-powerful large language models (LLMs) that can run on-device, and said his company will ensure sure its silicon make that possible.
Arm CEO Rene Haas had a slightly different take, admitting that today’s smartphone chips were designed before LLMs appeared.
“We're in a phenomenal time in our industry where the compute demands are outpacing the silicon to serve it,” he said. “We get lots of questions about the smartphone market and the AI capabilities to harness what's going on inside there. You have to remember that these smartphones were - the chips for these smartphones were designed two, three years ago, the memory subsystem, the power, everything was predefined."
“So, to be able to fit these small language models or anything that goes inside the phone is quite a challenge given the fact that you still have to run a display, you still have to run an operating system, you still have to run apps,” he added.
Arm will try to develop products faster so device-makers have the kit they need to make on-device LLMs sing. Or draw, write, and otherwise improve apps and OSes. Allegedly. ®
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[1] https://www.theregister.com/2021/03/16/qualcomm_closes_nuvia_announces_chipset/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z6SWVgrroCZoV3csRxcemwAAAIk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2022/08/31/arm_sues_qualcomm/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z6SWVgrroCZoV3csRxcemwAAAIk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z6SWVgrroCZoV3csRxcemwAAAIk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2024/12/23/qualcomm_arm_trial/
[7] https://s204.q4cdn.com/645488518/files/doc_financials/2025/q1/QCOM-12-29-24-Q1FY25-10-Q.pdf
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z6SWVgrroCZoV3csRxcemwAAAIk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2024/05/21/qualcomm_windows_microsoft/
[10] https://www.theregister.com/2025/01/22/samsung_galaxy_s25/
[11] https://investors.arm.com/static-files/ca83d6af-e2d0-4d66-9458-62ab92410f4a
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z6SWVgrroCZoV3csRxcemwAAAIk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2025/01/30/microsoft_surface_intel/
[14] https://www.theregister.com/2025/01/24/qualcomm_cristiano_amon_pay_increase/
[15] https://www.theregister.com/2025/01/20/microsoft_nvidia_ai_pcs/
[16] https://www.theregister.com/2025/01/14/intel_xeon_lead_qualcommm_move/
[17] https://www.qualcomm.com/news/releases/2025/02/qualcomm-announces-first-quarter-fiscal-2025-results
[18] https://newsroom.arm.com/news/arm-holdings-plc-reports-results-for-the-third-quarter-of-the-fiscal-year-ended-2025
[19] https://www.theregister.com/2025/02/01/deepseek_kettle_ai/
[20] https://whitepapers.theregister.com/
Re: Way to trash your brand!
No, I'd agree with your assessment. This is the new management failing to understand how the old management got ARM to where it is today, and the failure of this lawsuit is the best thing that could have happened to them. Especially as there's now a viable competitor in the form of RISC-V.
Whilst folks in Britain are happy to celebrate ARM's success, we're also more than happy to point out their flaws. We have plenty of examples of bad management in our post-war industries, and frankly pointing them out is almost a hobby for some!
Re: Way to trash your brand!
"We have plenty of examples of bad management in our post-war industries, and frankly pointing them out is almost a hobby for some!" .
I suppose trainspotting is more rewarding than flushing out unicorns.
Not too many examples of middling or even competent management let alone whiff of excellence in any arena I suspect.
The UK isn't exactly alone in that.
Re: Way to trash your brand!
So a startup gets a special deal from ARM intended to help the startup and encourage adoption.
Big established company buys start up and gets preferential deal intended for startup.
In future, special deals for startups are harder to negotiate because of big company grab.
There's a gun in my hand and it's pointing at your head.
I'm clearly not the trusting kind. How do you go into business with someone like ARM when they can cancel the license for your core product at any time and basically sink your business overnight? You can't just jump over to something like RISC-V without a complete redesign of your products.
Re: There's a gun in my hand and it's pointing at your head.
Guess the two licenses were different enough, seems trivial to us but it's their whole income model.
The best possible outcome for ARM
The lawsuit should never have happened, but as it did happen this is the best possible outcome for ARM.
The current management seems to fail to understand what got ARM into its position today. They offer a decent design with high performance and low power consumption, they have excellent toolchains for them, but they don't tie you to a fab because they don't have one. And their licensing is quite literally pennies per chip.
That's why they're the go-to for embedded devices and small form factors. They were cheaper than their competitors AND more flexible.
The overlooked thing is that there was definitely more money on the table to be taken. Early embedded devices were using old Zilog processors, or Motorola 68000 series ones. In the high performance arena there was a plethora of options, but most notably PowerPC became popular in embedded use for a while. ARM swept them all away because their business model depended on their partner fabs choosing bulk sales over higher margins.
But Softbank want a fast return on their investment, so have decided to throw this away.
In the process they've ruined their reputation AND sent a message that they're not necessarily the reliable partner that they once were.
And they've done this at a time when a viable competitor has arrived - RISC-V. I'd bet pennies to pounds that Apple have a coupe of development boards running their operating systems on RISC-V, just in case this lawsuit succeeded.
ARM won't vanish overnight, but unless they - and their owners - understand what made them big, they're going to go into a slow decline.
Their advantage over RISC-V is a slim one, and it's in those toolchains and their higher end designs. Perhaps they'll have to abandon the lower end of the market to RISC-V eventually, but their ecosystem advantage would make low licensing fees profitable for years to come. Sadly, the greed of their current owners means I'm not sure that they'll be able to take such a long term view, and that they'll continue to do damned foolish things like suing one of their largest customers.
Re: The best possible outcome for ARM
.
... greed of their current owners ...
SoftBank, a multinational investment holding company.
Did you expect anything else?
It was a huge blunder on behalf of the UK to allow them to take over/purchase ARM.
.
RISC-V for no other reason but to end the licensing mess or ARM and X86. Why does anyone need a license to make something? Just dump these license ISAs in the dustbin of history already.
Way to trash your brand!
So if a start-up works with Arm,
Arm expects their work to be deleted if when they get purchased? Unless they are purchased by a mega corp with deep pockets for lawyers.
Sueing your own customers is a strange tactic.
Pushes startups to risk V.
Im sure on a UK website this will get voted down. But to me, it looks like mangelment lotechs damaging the work of the hitechs,
and pointless legal battles proving the value of open-source in biz.