Arm terminates Qualcomm's chip design license, could lead to shortages and price hikes of chips
To say that things have escalated would be a severe understatement. Find out why here.
#arm #qualcomm #snapdragon #android
This article was first published on 23 October 2024.
23 December 2024: Qualcomm won for the time being. The updated story is here.
Qualcomm's HQ in San Diego Photo: Bloomberg
The ongoing legal dispute between Arm and Qualcomm escalated with the former issuing a notice to terminate the latter's chip design license.
Bloomberg reports that Arm has issued a 60-day notice to Qualcomm to terminate its architectural license. The license is essential for Qualcomm to design its Snapdragon mobile platforms based on Arm's technology.
Since the majority of the world's Android smartphones are powered by some form of Qualcomm Snapdragon chip, Arm's decision to terminate Qualcomm's license could have far-reaching ramifications.
In the short to medium term, it could lead to shortages and price hikes as smartphone makers battle over limited supply and look for alternative chipset solutions.
In addition, without the license, Qualcomm cannot continue the development of future Snapdragon mobile platforms.
It could even forced to stop sales of existing mobile platforms to its customers. This could potentially lead to legal action by its customers as they sue Qualcomm for damages.
The sale of Snapdragon chipsets is one of Qualcomm's main sources of income. Reports estimate Qualcomm's revenue from the sale of Snapdragon chipsets to be around US$39 billion. It goes without saying that losing the ability to sell Snapdragon chips would be financially ruinous for Qualcomm.
The legal dispute between the two companies started in 2022 when Arm sued Qualcomm for breaching contract terms following the latter's acquisition of Nuvia – another Arm licensee. Arm believes that Nuvia's technologies, which were developed with Arm's licenses, could not be transferred to Qualcomm without its approval.
Further complicating matters is that Arm recently started offering complete chip designs, instead of merely providing instruction sets to companies like Qualcomm. This makes Arm a direct rival to Qualcomm.
Source: Bloomberg via Android Authority
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