Qualcomm: Arm will charge royalties for using its processors
British chip designer will change its business model to a direct licence-type, says Qualcomm.
British chip designer Arm will stop licensing its CPU designs to chip makers after 2025, and will instead charge royalties for using Arm-compliant processors, semiconductor giant Qualcomm has claimed.
Qualcomm made the allegations in its updated response [pdf] to Arm's lawsuit against the American chip manufacturer.
Arm is attempting to prevent Qualcomm from developing custom Arm-compatible CPUs using CPU core designs that Qualcomm obtained via its purchase of Nuvia.
The British firm filed a lawsuit against Qualcomm in August, alleging that it had violated its licencing terms. Arm is demanding that Qualcomm destroy its Nuvia CPU designs and pay damages.
Arm says the licenses it gave to Nuvia cannot be transferred to and utilised by Qualcomm, Nuvia's new parent company, without first receiving authorisation from Arm.
Qualcomm has so far failed to gain this approval and seems intent on incorporating Nuvia's designs into its own line of chips, regardless.
Under Arm's current business model, chipmakers buy designs and related IP from the firm under licence and use those designs to produce chips. They sell those chips to OEMs who use them in servers, phones and other products.
Qualcomm's new counterclaim, which was submitted to the court last month, says Arm has told at least one device maker using Qualcomm processors that it would have to obtain a 'new direct licence from Arm' to use its silicon in the future.
Under the new licence terms, OEMs will pay royalties directly to Arm for every Arm-based device sold. These manufacturers 'will not be able to obtain Arm-compliant chip[s] from 2025 forward' if they do not accept the licence, Qualcomm says.
Refusing the licence terms would exclude the OEM from the market; they would be unable to purchase Arm-compliant chips from Qualcomm or any other supplier.
'Arm has done this despite already having approached the OEM's competitors with a direct licensing offer, while acting as if Arm would only approach the competing OEMs if the threatened OEM declined the licence in the first instance,' Qualcomm added.
The company, which has floated itself as a potential stakeholder in Arm, added that chipmakers will be banned from offering OEMs processors that feature custom engines, such as GPUs, neural processing units, and image signal processors. Instead, they will be required to use only Arm-designed blocks because Arm intends to tie licensing of those components to the device-maker's CPU license.
In total, Qualcomm claims that Arm:
- Intends to discontinue licensing CPU technology as a standalone licence
- Won't grant semiconductor firms any further licences for CPU technology
- Will require licensees to get other technologies (Arm's GPU and NPU technology) only from Arm
In response Phil Hughes, vice president of external relations at Arm, said Qualcomm's submission is "riddled with inaccuracies," and that Arm will address many of them in its official legal response, scheduled to be submitted in the coming weeks.
Computing says:
Arm is in a bad place at the moment. Japanese owner SoftBank needs to raise funds and attempted to do so last year by selling the company to Qualcomm rival Nvidia. However, regulators stepped in to nix the deal over industry fears that Nvidia - an Arm licensee - could give itself preferential treatment.
However, while good for the industry as a whole the move has left SoftBank - whose profits fell 430% YoY in its June 2022 results - still holding a firm it wants to sell. Earlier this year it said it intends to hold an IPO for Arm and Qualcomm had raised itself as a potential investor; however, this ongoing legal battle may put that in question.