Qualcomm and Arm Holdings began another trial in a US federal court in Delaware on Monday, the latest stage in a long dispute between the chipmaker and the chip technology company. Qualcomm, one of Arm’s biggest customers, accuses Arm of withholding chip testing tools it was owed under contract and wants to stop paying Arm royalties, which could be worth billions of dollars, for up to five years.
Qualcomm also claims Arm leaked to the media its 2024 threat to terminate a key licence agreement, damaging talks over a chip deal with Meta Platforms. In her opening statement, Qualcomm lawyer Karen Dunn told the jury the company had been close to agreeing terms with Meta when Arm sent a notice saying Qualcomm was in breach of its architecture agreement, and then allegedly passed that letter to Bloomberg News. Meta grew worried that Qualcomm could lose its licence, she said, and by the time the deal was signed its value had fallen by $170m.
Arm rejects that account. Its lawyer, Gregg LoCascio, said the jury would hear that Meta had moved away from virtual reality headsets towards AI glasses and wanted to change the financial terms for Qualcomm chips as a result. “They were not harmed in the least,” he said. Judge Maryellen Noreika is considering whether to strike out the contract term that underpins Qualcomm’s demand for a five-year royalty holiday. If she does, Qualcomm could only seek a smaller amount in damages.
In a linked bench trial, the judge is also hearing whether Arm negotiated in good faith with Qualcomm over the next version of its chip technology. Qualcomm’s agreement with Arm runs until 2033. Chief executive Cristiano Amon gave evidence on Monday, while Qualcomm’s lawyers repeatedly pointed to a chart showing Arm seeking a 1,800% rise in royalties between version 9 and version 10 of its architecture. Under cross-examination, Arm’s lawyer asked whether a 2013 licence capping royalties at $1.88 per chip with at least five processor cores was under-priced now that some data centre chips have 288 cores. Amon said he did not see it that way.
The trial is scheduled to last five days. The relationship between the two companies has been tense for years: Arm sued Qualcomm in 2022, claiming it had breached its contracts, and Qualcomm won a significant victory in that case in 2024.
