Qualcomm Secures Licensing Agreement as Arm Withdraws Breach Allegations

On February 5 (local time), Qualcomm CEO Cristiano Amon announced that Arm, the chip design company under SoftBank, had withdrawn its breach of contract allegations against Qualcomm and that there are "currently no plans" to terminate their licensing agreement.

The dispute traces back to 2019 when Arm granted Nuvia two licenses: a Technology License Agreement (TLA) allowing modifications to its existing CPU cores and an Architecture License Agreement (ALA) for designing custom cores using Arm's instruction set architecture (ISA). Arm stipulated that these licenses were granted for the development of data center-grade products and were non-transferable without Arm's approval.

In March 2021, Qualcomm acquired Nuvia for $1.4 billion, integrating its designs and expertise to develop customized CPU cores for competitive advantage. However, Arm contended that the transfer of Nuvia's licenses to Qualcomm was unauthorized, arguing that Nuvia's agreements could not be reassigned to its parent company without Arm's consent. As a result, Arm sought to modify Qualcomm's existing licenses to align with Nuvia's licensing terms, which Arm claimed involved higher royalty fees.

Qualcomm, on the other hand, maintained that its ALA fully covered Nuvia's designs, making additional licensing unnecessary.

Despite prolonged negotiations, no resolution was reached. In 2023, Qualcomm launched its Snapdragon X series chips, with shipments commencing in 2024. In October 2024, Arm issued a mandatory 60-day termination notice to Qualcomm, seeking to end its ALA, which would have barred Qualcomm from designing custom CPU cores using Arm's ISA.

However, in late December 2024, a jury in the U.S. District Court for the District of Delaware failed to reach a unanimous verdict on whether Nuvia's acquisition violated Arm's licensing terms. The outcome favored Qualcomm, as it was not found in breach of Nuvia's agreements with Arm.

Following this legal development, Arm withdrew its October 2024 breach notice against Qualcomm, effectively clearing the way for Qualcomm to continue leveraging Nuvia's technology to design CPU chips for markets such as PCs and automotive applications.