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Arm sues Qualcomm, seeking to unwind Qualcomm’s $1.4 billion Nuvia acquisition

The Qualcomm logo will be used at the IAA Mobility 2021 Munich Auto Show on September 8, 2021 in Munich, Germany. REUTERS/Wolfgang Rattay

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SAN FRANCISCO (Reuters) – SoftBank Group Corp’s (9984.T) chip technology company Arm said Wednesday it had sued Qualcomm (QCOM.O) and its recently acquired chip designer Nubia. License Agreement Violation and Trademark Infringement.

Arm seeks an injunction requiring Qualcomm to destroy designs developed under license agreements between Nuvia and Arm. It claimed that approval was required before these were forwarded to Qualcomm.

Qualcomm, which bought Nuvia last year for $1.4 billion, said Arm had no right to interfere with Qualcomm’s or Nuvia’s innovations. “Arm’s complaint ignores the fact that Qualcomm has well-established licensing rights covering custom-designed CPUs, and we are confident that those rights will be affirmed,” Qualcomm said. Ann Chaplin, general counsel, said in a statement.

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If Arm’s effort succeeds, it would effectively end one of Qualcomm’s biggest strategic acquisitions in recent years.read more

The lawsuit represents a major rift between Qualcomm and Arm, one of Qualcomm’s most important technology partners. Qualcomm has relied on Arm ever since it stopped designing its own custom computing cores. However, in recent years, the two companies have been at odds.

Several people at Qualcomm have privately complained that Arm’s pace of innovation has slowed and that Qualcomm’s chips are lagging behind Apple’s processors in performance.

Qualcomm acquires Nuvia, founded by former Apple chip architects, to create custom computing cores that differ from standard Arm designs used by rivals such as Taiwanese chip designer MediaTek Inc. (2454.TW) I restarted my efforts.

One of Qualcomm’s first goals with Nuvia technology is to challenge Intel (INTC.O) and Advanced Micro Devices (AMD.O). in the PC and laptop market they currently dominate. Qualcomm acquired Nuvia shortly after Apple ditched Intel and started using its own chips. It is also based on Arm technology and is used in Mac laptops.

Apple’s move has boosted Mac sales, and Qualcomm CEO Cristiano Amon told Reuters it hopes to do the same for the Windows-based laptop market using Nuvia’s Arm-based design. Qualcomm pays royalties every time it sells a chip that uses its technology, so Arm can still make more money. However, the deal with Nuvia and Arm could result in lower royalty rates.

TECHnalysis Research’s Bob O’Donnell said the deal highlights how interdependent the two companies are.

“Qualcomm’s opportunity to move its PC (and potentially server) business forward relies entirely on Nuvia’s design, and Nuvia is Arm’s primary vehicle for entering the Windows PC market.” It makes an impact,” he said.

The deal was seen as a way for Qualcomm to reduce its reliance on Arm. Until now, most of Qualcomm’s chips used compute cores licensed directly from Arm, while Nuvia’s cores use Arm’s underlying architecture but are custom designed.

For Qualcomm, using more custom core designs (a move Apple has also made) could reduce licensing costs to Arm in the short term and ease migration to rival architectures in the long term. there is.

A source close to Arm said the license between the company and Qualcomm is undisputed, and only technology developed under license from Nuvia is at issue in the lawsuit.

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Reporting by Jane Ranhey Lee and Stephen Ellis. Editing by Nick Zieminski and David Gregorio

Our standards: Thomson Reuters Trust Principles.

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