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Arm Cancels Qualcomm's Chip License After 60-Day Notice, Escalating Feud

Oct 23, 2024, 04:15 AM

Arm Holdings Plc has announced the cancellation of a license agreement that allowed Qualcomm Inc. to use Arm's intellectual property to design chips, marking a significant escalation in the ongoing legal dispute between the two companies. The British chipmaker has given Qualcomm a 60-day notice of cancellation for the architectural license agreement, which is crucial for Qualcomm to develop custom processors based on Arm architecture, including the Snapdragon X Elite chip. This move follows Arm's lawsuit against Qualcomm in 2022 for breach of contract. The cancellation threatens to disrupt the smartphone and PC markets, as Qualcomm relies on Arm's technology for its widely used processors. Qualcomm has criticized Arm's actions, accusing the company of employing 'strong-arm' tactics to increase royalty rates for its intellectual property. The cancellation of the license could have substantial implications for both companies and the broader technology industry, as hundreds of millions of devices rely on chips designed through this agreement. Following the news, Qualcomm's shares fell by approximately 4.5% in premarket trading.