Arm and Qualcomm are Playing a Dangerous Game of Chicken

upstart writes:

Arm and Qualcomm are playing a dangerous game of chicken:

In its lawsuit filed against Qualcomm last August, Arm sought to block custom processor core technology acquired by the Snapdragon giant. The reason Arm believes this should happen? Qualcomm allegedly breached Arm's licensing agreements by continuing development of custom cores after the two parties failed to negotiate a new deal for the tech's use.

Qualcomm, by contrast, believes its existing agreements with Arm cover the custom cores it gained from the 2021 acquisition of chip startup Nuvia.

If Arm's lawsuit is successful, it would significantly stifle Qualcomm since the company plans to use the Nuvia technology for future chips in several major market segments. But to some analysts, Arm could suffer more than Qualcomm in the long term if it wins, making the lawsuit a risky move, even if it's based on sound legal reasoning.

[...] "The problem for Arm is that even if it wins the case, it loses," wrote Linley Gwenapp of TechInsights in an editorial published last month. "The company is seeking new revenue streams, and Windows PCs are a big opportunity. This market is served almost entirely by x86 processors from Intel and AMD, so any incremental share benefits Arm through royalty payments."

In the event that Arm decided to terminate all of Qualcomm's license agreements, that would do much greater damage to Arm's royalty and license revenues since the Snapdragon giant is such a major customer of the British chip designer.

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