Arm sues Qualcomm, aiming to unwind Qualcomm’s $1.4 bln Nuvia purchase

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Qualcomm logo is at the Munich Auto Show, IAA Mobility 2021 in Munich, Germany, September 8, 2021. REUTERS/Wolfgang Rattay

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SAN FRANCISCO, Aug. 31 (Reuters) – Chip technology company Arm Ltd, which is owned by Softbank Group Corp (9984.T), said Wednesday it had sued Qualcomm Inc (QCOM.O) and Qualcomm’s recently acquired chip design company Nuvia Inc for breach of license agreements and trademark infringement.

Arm is demanding a court order that would require Qualcomm to destroy designs developed under Nuvia’s licensing agreements with Arm. Arm claimed his approval was required before these could be transferred to Qualcomm.

Qualcomm, which last year acquired Nuvia for $1.4 billion, said Arm has no right to interfere with Qualcomm’s or NUVIA’s innovations. “Arm’s complaint ignores the fact that Qualcomm has broad, established licensing rights for its custom CPUs, and we are confident those rights will be upheld,” Qualcomm General Counsel Ann Chaplin said in a statement.

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If Arm’s effort is successful, it would essentially wrap up one of Qualcomm’s largest strategic acquisitions in recent years. read more

The lawsuit marks a major rift between Qualcomm and Arm, one of Qualcomm’s key technology partners. Qualcomm has relied on Arm since it stopped designing its own custom computer cores. But the companies have been at odds in recent years.

Some within Qualcomm have personally complained that Arm’s pace of innovation is slowing, leaving Qualcomm’s chips lagging behind Apple’s processors in performance.

Qualcomm bought Nuvia, founded by former Apple chip architects, to restart its efforts to create custom computer cores that would differ from the standard Arm designs used by rivals such as Taiwanese chip designer MediaTek Inc. (2454.TW).

One of Qualcomm’s first goals with Nuvia’s technology is to challenge Intel Corp (INTC.O) and Advanced Micro Devices Inc (AMD.O). in the PC and laptop markets they now dominate. Qualcomm acquired Nuvia shortly after Apple dumped Intel to use its own chips, also based on Arm technology, in its Mac laptops.

Apple’s move boosted Mac sales, and Qualcomm CEO Cristiano Amon told Reuters he wanted to use Nuvia’s Arm-based designs to do the same for the Windows-based laptop market. Arm would still make more money because Qualcomm pays it a royalty on every chip it sells that uses its technology. But it’s possible that royalty rates will be lower under Nuvia’s deal with Arm.

The agreement shows just how interdependent the two companies are, said Bob O’Donnell of TECHnalysis Research

“Qualcomm’s opportunity to move forward with the PC (and possibly server) business is completely dependent on Nuvia designs, and Nuvia is the primary means through which Arm can get into Windows PCs. So the companies really need to work well together if they have a meaningful impact on the PC market,” he said.

The deal was seen as a way for Qualcomm to reduce its reliance on Arm. In the past, most Qualcomm chips have used computer cores licensed directly from Arm, while Nuvia’s cores use Arm’s underlying architecture but are custom designs.

For Qualcomm, using more custom core designs—a move Apple has also taken—could reduce some Arm licensing costs in the short term and make it easier to move to a competitive architecture in the longer term.

A source close to Arm said the licensing with Qualcomm was not up for discussion and only technology developed under Nuvia’s licenses was challenged in the lawsuit.

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Reporting by Jane Lanhee Lee and Stephen Ellis; Editing by Nick Zieminski and David Gregorio

Our Standards: The Thomson Reuters Trust Principles.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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