Arm set to cancel chip design licence for Qualcomm

Qualcomm has accused British chip designer Arm of strong-arm strategies after the company said it would cancel its chip design licence with the American manufacturer.

Qualcomm, which uses Arm’s designs for its chips, claimed on Tuesday the move was an attempt to hike royalty rates. It also said it could disrupt an ongoing intellectual property dispute in the US, set to go to trial in Delaware in December.

According to Bloomberg, Arm has issued Qualcomm a 60-day notice to terminate the licensing agreement.

A licence revocation could put billions of dollars in revenue at stake, as it is likely to hurt Qualcomm’s ability to ship hardware designed using Arm’s patented architecture.

Qualcomm said Arm’s reasoning for cancelling the licence was “completely baseless”.

“This is more of the same from Arm,” it said, “more unfounded threats designed to strong-arm a longtime partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights under our architecture licence.”

Arm declined to comment.

The two tech giants first clashed in 2022 when Arm sued Qualcomm over its $1.4bn (£1.08bn) acquisition of chip design firm Nuvia, claiming the deal led to unauthorised use of its intellectual property. Qualcomm denies these allegations.

Qualcomm, one of Arm’s biggest customers, once eyed a takeover of the Cambridge-based company.

However, Arm returned to public markets last year via a blockbuster IPO in New York, with a $54.5bn valuation. Since then, the stock has risen by more than 150 per cent.