# Qualcomm Relies on Arm More Than Arm Relies on Qualcomm
In the semiconductor industry, few entities are as vital to the contemporary technology framework as **Arm** and **Qualcomm**. Arm is the corporation responsible for the processor architecture that drives almost every smartphone, tablet, and IoT device available today. Qualcomm, on the other hand, is a leading force in the mobile chipset market, manufacturing the popular Snapdragon processors that are commonplace in numerous Android devices. Nonetheless, recent legal confrontations between the two firms have underscored a harsh truth: Qualcomm is far more dependent on Arm than Arm is on Qualcomm.
### Arm: The Core of Contemporary Devices
Arm’s architecture serves as the cornerstone upon which brands like **Apple**, **Google**, **MediaTek**, and **Qualcomm** construct their processors. Arm develops the core architecture, and its affiliates license this intellectual property (IP) to fabricate custom chips for a range of applications, from smartphones to servers. Arm’s influence extends beyond mobile gadgets, powering **AI processors**, **automotive technology**, and even **cloud servers**. In essence, Arm is crucial to the tech sector.
This supremacy is the reason **Nvidia** sought to acquire Arm in 2020 for $40 billion, a transaction that ultimately faced obstacles from regulatory agencies like the **FTC** due to antitrust issues. The buyout would have granted Nvidia oversight of an essential component of the global technological landscape, raising concerns regarding competition and market integrity.
### Qualcomm’s Legal Challenges with Arm
Tensions between Qualcomm and Arm intensified in 2021 when Qualcomm purchased **Nuvia**, a startup focused on high-performance Arm-based chips for servers, for $1.4 billion. Nuvia’s founder, Gerard Williams III, previously designed chips for Apple, and the acquisition was perceived as a tactical move by Qualcomm to enhance its chip design prowess, particularly in the server and laptop arenas.
However, there was a complication: Nuvia held a license from Arm to utilize its architecture, and Arm argued that this license was **non-transferable**. Conversely, Qualcomm contended that it was entitled to use Nuvia’s designs without renegotiating the agreement with Arm. This conflict resulted in a legal dispute, with Arm claiming Qualcomm had **violated its license agreement**. Arm eventually issued a **60-day notice** to Qualcomm, instructing it to cease using Arm’s intellectual property unless the terms were renegotiated.
### Qualcomm’s Reaction
Qualcomm has swiftly defended its stance, accusing Arm of employing “unjustified threats” to coerce the company into accepting higher royalty fees. In a statement, Qualcomm remarked:
> *”This is just more of the same from Arm – more unjustified threats aimed at coercing a long-standing partner, obstructing our performance-leading CPUs, and inflating royalty rates despite the extensive rights under our architecture license. With a trial rapidly approaching in December, Arm’s desperate maneuver seems to be an effort to disrupt the legal proceedings, and its claim for termination is entirely unfounded.”*
Qualcomm is optimistic that the judiciary will rule in its favor, but the risks are tremendously high. Should Qualcomm be denied access to Arm’s architecture, it would have to cease the manufacturing of its Snapdragon chips, which play a critical role in the global smartphone market.
### Arm’s Stance
Arm has held firm in its viewpoint. The company asserts that Qualcomm has consistently violated its license agreement and that it has no alternative but to pursue legal action. In its announcement, Arm stated:
> *”In light of Qualcomm’s continuous substantial breaches of Arm’s license agreement, Arm finds itself with no choice but to initiate formal action requiring Qualcomm to rectify its breach or risk termination of the agreement. This is essential to safeguard the unparalleled ecosystem that Arm and its highly esteemed partners have cultivated over more than three decades.”*
Arm is confident that the courts will favor their position, and they are set to proceed to trial in December.
### Why Qualcomm is More Dependent on Arm
The essence of the matter is that Qualcomm relies heavily on Arm’s architecture to manufacture its chips. If Qualcomm is compelled to discontinue using Arm’s IP, the fallout would be disastrous for the company. Qualcomm’s Snapdragon processors are utilized in a wide variety of devices, including smartphones, tablets, laptops, and IoT devices. Losing access to Arm’s architecture would require Qualcomm to either create its own architecture from square one—a daunting and drawn-out endeavor—or license technology from a different company, which seems improbable given the supremacy of Arm’s ecosystem.
In contrast, Arm boasts a varied customer base, featuring **Apple**, **Nvidia**, **Samsung**, and **MediaTek**. Although losing Qualcomm as a client would financially impact Arm, it wouldn’t spell disaster. Arm’s architecture is so deeply integrated within the tech sector that it would continue to thrive even without Qualcomm. This provides Arm a considerable advantage in the ongoing legal confrontation.
### The Conclusion
