Mr Viral
Analysis Qualcomm’s push into the PC arena is safe, at least for the moment, after a jury found its mobile processor designs had not violated Arm Holdings’ licenses as the British chip designer had claimed.
The decision came after five days of deliberations, marking the end of a more than two-year legal battle between Arm and one of its largest customers over allegations Qualcomm had breached the terms of its licenses when it acquired Nuvia back in 2021 for $1.4 billion.
The jury decided in Qualcomm’s favor with regard to two questions regarding the terms of its licenses with Arm: the case ultimately ended in a mistrial after the jury failed to resolve one of three questions set before them. Those questions boiled down to the following issues:
Did Arm prove that Nuvia had breached the terms of its architecture license agreement (ALA) with Arm?
Did Arm prove that Qualcomm breached the terms of Nuvia’s ALA?
Did Qualcomm prove that its CPUs that include designs acquired in the Nuvia acquisition were licensed under its ALA?
The jury found in Qualcomm’s favor on questions two and three, but was unable to reach consensus regarding whether Nuvia had breached its ALA with Arm.
“We are pleased with today’s decision. The jury has vindicated Qualcomm’s right to innovate and affirmed that all the Qualcomm products at issue in the case are protected by Qualcomm’s contract with ARM,” Qualcomm said in a statement following the verdict. “We will continue to develop performance-leading, world-class products that benefit consumers worldwide, with our incredible Oryon ARM-compliant custom CPUs.”
These products include Qualcomm’s Snapdragon X-Elite and X-Plus processors now found in a variety of AI PCs, as well as its Snapdragon 8 Elite smartphone chips.
The designs were central to the case, with Arm arguing that the licenses granted to Nuvia to design an Arm-based server processor, couldn’t be transferred to Qualcomm without its permission.
However, the bigger issue related to Qualcomm’s Nuvia-derived Oryon cores came down to how the royalty payments collected by Arm under the deal. Nuvia was apparently subject to a higher royalty rate than Qualcomm’s mobile system on chip (SoC) designs. The issue came when Qualcomm attempted to use Nuvia’s tech at that lower rate.
A victory for Qualcomm’s PC expansion
The jury’s findings regarding Qualcomm’s actions mark a victory for the mobile chip giant’s PC ambitions.
Had the jury leaned in Arm’s favor, the trial could have significantly impacted Qualcomm’s PC push, sending it back to the drawing board on SoC designs or forcing it to renegotiate less favorable royalty rates with Arm. The latter could have resulted in more expensive products, making them less competitive with x86-based AI PCs from Intel and AMD.
Introduced in May, Qualcomm’s Snapdragon X-Elite and X-Plus, while not its first foray into the PC market, were among its most competitive, at the time boasting performance 2x higher in multithreaded workloads compared to Intel’s 10-core Raptor Lake 1355U and 12-core 1360P processors.
What’s more, the chips were the first parts on the market to meet Microsoft’s lofty 40 TOPS Copilot+ benchmark for AI PCs. Only chips with neural processing units capable of meeting this bar would get access to Microsoft’s growing number of local AI features, including its controversial Recall feature.
However, the exclusive nature of Qualcomm’s X-series chips was rather short lived. Within months of the X-Elite’s launch, both AMD and Intel introduced powerful new SoCs of their own, with NPUs qualifying them for the Copilot+ PC brand.
This put Qualcomm in a vulnerable market position, with the future of these chips in the jury’s hands. Arm had already made moves to derail Qualcomm’s Oryon-based chips. In October, Arm reportedly moved to cancel Qualcomm’s architecture licenses in an apparent bid to stall its latest generation of products based on those designs.
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While it seems Qualcomm’s custom core designs are safe for now, with only two of three questions decided, the story isn’t over yet.
“We are disappointed that the jury was unable to reach consensus across the claims. We intend to seek a retrial due to the jury’s deadlock,” the chip designer said in a statement, received by El Reg following the conclusion of the trial. “From the outset, our top priority has been to protect Arm’s IP and the unparalleled ecosystem we have built with our valued partners over more than 30 years. As always, we are committed to fostering innovation in our rapidly evolving market and serving our partners while advancing the future of computing.”
The fact is that Qualcomm, one of Arm’s largest customers, is still heavily dependent on the IP house’s technology. As such, finding an equitable resolution is in both party’s long term interests.
Further complicating the matter, Qualcomm’s success in competing with Intel and AMD in the PC is a double-edged sword for Arm. For better or worse, Qualcomm’s X-chips serve as Arm’s ambassador to the AI PC space and show the architecture is viable in more than mobile and server applications.
On the other hand, Qualcomm’s X-series chips don’t necessarily represent the best Arm has to offer. The Oryon core is based on an older ARMv8 design, which lacks, among other things, AI centric features found in modern ARMv9 designs, like those used in Apple’s M4 SoCs.
Perhaps, the most concerning challenge for Arm and why it seems bent on retrying the case is the precedent it sets. If Qualcomm can get away with acquiring chip technologies from Nuvia without renegotiating architecture licenses, what’s to stop someone else from doing the same? And so, while this chapter of the Arm vs. Qualcomm saga may be over, it seems the story is far from over. ®
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