Arm CEO Minimizes Company’s Chipmaking Plans Amid Legal Dispute with Qualcomm
In a federal court in Delaware, the CEO of Arm Holdings, Rene Haas, has downplayed the company’s desire to become a chip supplier, addressing the ongoing legal battle with Qualcomm. Arm, a critical player in the chip industry, claims Qualcomm used its technology without permission, triggering a lawsuit centered on Qualcomm’s 2021 acquisition of chip startup Nuvia for $1.4 billion.
This high-stakes case highlights a dispute over Qualcomm’s royalty rates, with Arm seeking the destruction of Nuvia’s designs, which form the basis of AI-driven low-powered chips used in Qualcomm’s products. Microsoft and other companies expect these chips to help the Windows operating system challenge Apple’s dominance in the laptop market.
Arm’s Position: Protecting Its Licensing Model
Arm’s core business model revolves around licensing its technology to companies across the chip industry, positioning itself as a neutral player. The dispute stems from allegations that Qualcomm should honor Nuvia’s royalty rates instead of benefiting from Qualcomm’s lower rates, which could harm Arm’s business structure.
During the trial, documents were presented showing that Nuvia’s royalty rates were significantly higher than Qualcomm’s. Allowing Qualcomm to pay lower rates could potentially cost Arm up to $50 million in lost revenue.
Arm’s Future Strategy: No Plans for Chip Production
Despite Qualcomm’s attorneys suggesting that Arm might view the company as a competitor, CEO Rene Haas firmly rejected the idea that Arm had any plans to enter the chipmaking business. In response to questions, Haas stated that Arm has never built chips, but he acknowledged that he is always considering possible strategies for the future.
“We’ve never had an issue like this,” Haas told the court, further clarifying that Arm’s focus remains on licensing technology rather than developing and manufacturing chips in competition with its clients.
The Fallout from Nuvia’s Acquisition
As part of the ongoing legal proceedings, Qualcomm’s legal team highlighted a document in which Haas presented a strategy for Arm to design its own chips. However, Haas downplayed this document, insisting that it was simply a part of ongoing strategic evaluations, not a definitive move into chip production.
Additionally, Arm sent letters to numerous Qualcomm customers, including Samsung Electronics, warning that the destruction of Nuvia’s technology could be forced if the case moved forward. Qualcomm’s attorneys claimed that these letters were “misleading” and questioned whether Arm’s actions would disrupt Qualcomm’s ability to deliver chips for the PC industry.
Legal Proceedings and Next Steps
The trial is nearing its conclusion, with Arm expected to call its final witnesses and present video evidence from depositions before resting its case. Qualcomm’s CEO Cristiano Amon may take the stand next. While Arm has not requested monetary damages, industry analysts estimate Qualcomm pays Arm around $300 million annually in licensing fees.
The judge indicated that deliberations could begin as soon as Thursday, with the outcome of the case potentially having significant implications for the chip industry. Arm, a British-based company owned by SoftBank Group, went public in the U.S. in 2023.
Source: Reuters
