The licensing contract dispute between chip giants Qualcomm and Arm is at a critical stage of trial. In the U.S. Federal Court in Delaware, after five days of hearings, the jury failed to reach a verdict on October 9 and will continue deliberations next Tuesday. This lawsuit marks the second direct legal confrontation between the two companies within two years.
Qualcomm's demands are extremely rare. Qualcomm seeks to stop paying licensing royalties to Arm for up to five years, involving amounts potentially reaching billions of dollars. At the same time, Qualcomm also hopes to force Arm to license the V10 instruction set architecture, which is Arm's next-generation core architecture version and has never been opened to third parties before.
The trigger for this lawsuit was a leaked letter. Qualcomm accused Arm of withholding software patches and tools required for chip design and violating price protection agreements. More critically, Qualcomm claimed that Arm leaked a 2024 letter to Bloomberg, in which Arm accused Qualcomm of violating key licensing agreements.
Qualcomm stated that this leak directly harmed its chip partnership negotiations with Meta, resulting in a contract value reduction of approximately $170 million (about RMB 1.22 billion).
Arm completely denied the claims. Arm's lawyers stated that Qualcomm did not suffer damages from the aforementioned actions and that the lawsuit was merely a tactic to gain leverage in licensing negotiations. Arm also refuted that the transaction with Meta mentioned by Qualcomm was only "speculative" and did not cause substantial harm.
In fact, grievances between the two sides have been accumulating for a long time. Since SoftBank acquired Arm in 2016, Arm shifted from solely licensing chip technology to selling its own chips, worsening its relationship with Qualcomm. Qualcomm currently holds an Arm architecture license valid until 2033, but whether an agreement can be reached on new architectures like V10 is the key issue in this dispute.
Qualcomm's entire chip business relies on Arm. Qualcomm's lawyers stated bluntly in their opening arguments: "The situation is very serious because Qualcomm's entire chip business depends on Arm fulfilling its contracts and keeping its promises." According to Arm's annual report, Qualcomm accounts for 9% of its total revenue.
The outcome of this lawsuit could reshape the licensing landscape of the semiconductor industry. If Qualcomm successfully obtains a five-year exemption from licensing fees, it will directly challenge Arm's business model. Furthermore, the forced opening of V10 architecture licensing could change the competitive rules for next-generation chip technology.
The case is currently still under trial, with the final verdict expected to be announced next week.