What you need to know
- Qualcomm and Arm are engaged in a five-day jury trial in a Delaware federal court.
- The conflict stems from Qualcomm’s 2021 acquisition of the chip startup Nuvia. Qualcomm alleges Arm subsequently violated its contract by withholding mandatory chip-testing tools.
- Qualcomm is seeking to halt its royalty payments to Arm for up to five years.
- A secondary bench trial is investigating whether Arm negotiated its next-generation architecture in good faith. The two companies are currently locked into a contract through 2033.
The stakes in the smartphone sphere have just gotten a billion dollars higher. Qualcomm and Arm are back in a Delaware federal court this week for a five-day jury trial that threatens to upend how the chips that power your phone are licensed and built.
Reuters reports that Qualcomm is battling to halt its royalty payments to Arm for as long as five years, a huge financial blow for the chipmaker, which makes up about 9% of Arm’s fiscal 2026 revenue based on market research firm Intellectia’s figures.
The heart of the disagreement is Qualcomm’s 2021 acquisition of chip startup Nuvia, which had its Arm license. Qualcomm said Arm declined to provide the tools necessary to test chips, as required in its contract. Qualcomm also said Arm leaked its threat to end a key license in 2024, which hurt talks on a potential chip deal with Meta.
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The dispute with Meta could serve as one of the trial’s most concrete measures of damages. Qualcomm says the leak helped knock $170 million off the eventual value of its Meta deal. Arm denies that link, saying the economics of the deal changed because Meta shifted away from virtual reality headsets to AI glasses.
The fight over royalty is even bigger. Qualcomm wants to avoid paying Arm for as long as five years, risking billions of dollars of royalties. Judge Maryellen Noreika is considering whether that five-year provision should stand, which could dramatically affect how much Qualcomm can collect.
Qualcomm says Arm undercut its business after the Nuvia deal, and Arm says the suit is just leverage in a business dispute and Qualcomm can’t prove it was damaged.
Another bench trial is investigating whether Arm negotiated in good faith over its next-generation architecture. They are currently under contract through 2033.
The five-day trial may end up deciding a lot more than one royalty bill. It could also change the way Arm and the biggest chipmakers negotiate the price and control of future CPU technology.