Editorial: Arm’s No-Win Legal Fight
Arm and Qualcomm are locked in an ugly public spat over the rights to Nuvia’s CPU. Unresolved, this conflict could hamper Arm’s progress in the PC market and foment interest in RISC-V.
A private disagreement between Arm and Qualcomm has become an ugly public spat between the leading vendor of processor intellectual property (IP) and one of its largest customers. The dispute centers on Qualcomm’s 2021 acquisition of startup Nuvia and its custom Arm-compatible CPU design. Arm refused to approve the deal unless Qualcomm paid additional royalties and fees. After the two companies failed to agree on appropriate payment, Qualcomm continued to develop products using the Nuvia CPU, claiming Arm’s consent was unnecessary. Arm then filed a lawsuit seeking to force Qualcomm to destroy the CPU design and any products based on it. But winning such a severe judgment would hurt Arm as much as Qualcomm.
The problem for Arm is that even if it wins the case, it loses. The company is seeking new revenue streams, and Windows PCs are a big opportunity. This market is served almost entirely by x86 processors from Intel and AMD, so any incremental share benefits Arm through royalty payments. Because PC processors are more expensive than smartphone processors, they generate more royalties per unit. Microsoft released Windows for Arm but has granted Qualcomm exclusive rights to serve this market.
Qualcomm has released several processors for Windows PCs, but they’ve had little success. A common criticism is that these processors, which rely on Arm Cortex CPUs, deliver less performance than x86 PC processors. Qualcomm hopes the Phoenix core will close this gap.
If Arm forces Qualcomm to abandon the Nuvia CPU, the chip vendor will remain in this uncompetitive position. Therefore, Arm would probably gain little share or revenue from Windows PCs. Simply by filing the lawsuit, it’s dissuading PC makers from adopting Qualcomm’s future Nuvia-based processor for fear it could be suddenly pulled from the market, or that Arm could sue a PC maker that uses it.