Arm Cancels Qualcomm’s License Amid Intensifying Legal Battle

Arm has notified Qualcomm that it plans to cancel a longstanding license agreement that allowed Qualcomm to design its own chips using Arm’s intellectual property, Bloomberg is reporting.

This development is part of an intensifying feud between two of the most influential companies in the semiconductor industry, and it could have far-reaching consequences for the smartphone and personal computer markets.

According to a document seen by Bloomberg, Arm has provided Qualcomm with a 60-day notice of termination for its architectural license agreement, which has been central to Qualcomm’s ability to create its own chips based on Arm’s technology.

Arm’s decision to revoke the license could severely disrupt Qualcomm’s operations, as the San Diego-based company relies heavily on Arm’s intellectual property to power its widely used Snapdragon processors.

This announcement caused an immediate market reaction, with Qualcomm’s stock falling by as much as 3% and Arm’s American depositary receipts dropping by 6.4% after trading opened in New York on Wednesday.

Qualcomm’s Snapdragon chips are at the heart of most Android smartphones, and the cancellation of this license could impact a large portion of its $39 billion annual revenue. If Qualcomm is unable to resolve the dispute, it may be forced to halt sales of key products or face significant damages.

The conflict between the two tech giants began in 2022, when Arm sued Qualcomm for breach of contract and trademark infringement. Arm’s latest move intensifies the legal battle, giving Qualcomm an eight-week window to address the situation before the license is officially revoked.

If Arm follows through with its license termination, Qualcomm would lose its ability to design chips using Arm’s instruction set, which is the foundational technology behind many mobile processors.