Asia Tech Wire (Oct 23) -- Arm Holdings plc plans to cancel a license for longtime partner Qualcomm Inc. to use its intellectual property to design chips, according to Bloomberg.
Wednesday's report cited a document stating that Arm Arm has given Qualcomm a mandated 60-day notice to cancel the license agreement, which allows Qualcomm to design its own chips based on standards owned by Arm.
Qualcomm sells hundreds of millions of processors each year and its technology is used in most Android smartphones.
If the notice to cancel the license agreement goes into effect, Qualcomm may have to stop selling them or face huge damages.
In response, Arm said it had no comment.
A Qualcomm spokesperson responded, "This is what Arm has always done - more baseless threats aimed at strong-arming long-time partners, interfering with our performance-leading CPU products, and raising license rates in disregard of the extensive rights already covered by the architectural license agreement between the two parties. "
"In advance of the upcoming court hearing in December, Arm has resorted to this ploy out of desperation in what appears to be an attempt to interfere with the legal process, and its claim to terminate the license agreement is baseless," the spokesperson said, adding, "We are confident that the rights covered by the Qualcomm-Arm agreement will be be recognized by the courts. Arm's anticompetitive behavior will not be tolerated."
The news comes as the two tech giants are in the midst of a legal battle. The lawsuit is scheduled to go to trial in Delaware federal court on Dec.
Arm, a chip company owned by Japan's SoftBank Group, filed a lawsuit against Qualcomm in 2022, alleging that Qualcomm failed to negotiate a new license agreement after acquiring Arm licensee Nuvia.
Nuvia was founded by former Apple chip engineers, and Qualcomm acquired the chip design startup in 2021 for $1.4 billion.
Arm argued that Qualcomm should have renegotiated its chip design license with it after its acquisition of Nuvia.
However, the two sides failed to reach an agreement, which ultimately led to the outbreak of this legal dispute.
As per the latest notice, Arm has given Qualcomm eight weeks to resolve the dispute.
