Just a day after revealing its new Snapdragon 8 Elite mobile processor, Qualcomm may lose its license to develop custom chips in the next 60 days. The news comes as chip designer Arm has escalated a lawsuit against Qualcomm relating to its acquisition of a company called Nuvia.
It turns out that Nuvia held a license to develop custom chips based on Arm’s IP. Arm claims that Nuvia’s license was not transferred to it after it acquired Nuvia.
How does it affect Qualcomm?
The Snapdragon 8 Elite processor features Oryon custom cores, which were developed using Nuvia’s technology. This means that in two months’ time, in the worst-case situation, Qualcomm could be forced to stop selling its latest flagship chipset.
Will that happen?
It’s unlikely, in my opinion. This is probably an attempt by Arm to force Qualcomm to renegotiate its agreement with the company and thus pay more royalties. Basically, Qualcomm will probably end up paying more money to allay the fears of its customers and shareholders alike.
With big-money deals for the Snapdragon 8 Elite lined up to supply Samsung for its upcoming Galaxy S25 series, Qualcomm would also be loath to force the Korean giant further into MediaTek’s welcoming grasp.
A Qualcomm spokesperson gave a bullish response to The Register about Arm’s latest move:
“This is more of the same from Arm – more unfounded threats designed to strongarm a longtime partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights under our architecture license.”
“With a trial fast approaching in December, Arm’s desperate ploy appears to be an attempt to disrupt the legal process, and its claim for termination is completely baseless. We are confident that Qualcomm’s rights under its agreement with Arm will be affirmed. Arm’s anticompetitive conduct will not be tolerated.”
According to the document seen by Bloomberg, Arm has given Qualcomm 60 days to make amends, or it will suspend its architectural license to make processors using its Intellectual Property (IP). This could be an attempt to force Qualcomm to the negotiating table before the trial’s scheduled start on December 16.
In the meantime, Qualcomm’s shares have fallen around 5.5%, with Arm dropping 1.1% before US markets closed on Tuesday. Shareholders don’t like losing money, which means there will be pressure on both companies to resolve the matter sooner rather than later.
If the two companies fail to reach an agreement before the December 16 trial begins, this could impact Samsung and other brands, such as Honor, Realme, and OnePlus, that have already committed to using the Snapdragon 8 Elite in upcoming flagships.
For Samsung, this may mean relying on its Exynos chips, which won’t please its customers. For others, MediaTek’s new Dimensity 9400 chip could be the winning alternative.
One thing is for sure: MediaTek will be closely watching the battle between Arm and Qualcomm. Could we see a Galaxy S25 powered by the Dimensity 9400 next year? It would certainly be a huge step in MediaTek’s continuing push to bolster its reputation.
