[News] Qualcomm Dispute Highlights Arm’s Challenge Posed by Tech Giants’ Custom Silicon Designs

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A battle between two tech giants has been launched, as major IP supplier Arm Holdings is terminating its architectural license agreement with Qualcomm, the world’s top mobile chipmaker. The move may be regarded as a counter measure by Arm to the emerging trend of custom silicon designs, as companies like Apple, Qualcomm and MediaTek take sides.

According to a report by The Register, Arm has been the leading architecture provider for mobile chips since modern smartphones emerged, with its Cortex processors powering nearly every mobile device. However, as Apple and Qualcomm move toward custom silicon designs, Arm’s dominance seems increasingly under pressure.

Qualcomm’s Acquisition of Nuvia Reportedly Sidesteps Royalty Increase

It is worth noting that the recent lawsuit between Arm and Qualcomm may arise from technologies acquired by Qualcomm from Nuvia, a startup founded by former Apple chip engineers, which Qualcomm purchased for USD 1.4 billion in 2021.

According an industry insider familiar with the situation, originally, Arm charged royalties based on chip price, typically around 5% to 7% of the price tag. This structure reportedly applied to customers directly using Arm’s CPU IP or those licensing the instruction set/architecture, with the instruction set licensing generally being slightly lower.

Nevertheless, around two years ago, Arm attempted to significantly increase royalties by implementing a new licensing agreement for its highest-tier mobile CPU IP, changing the structure from 7% to a flat fee of USD 20 per chip, which would be quite a boon for the company, the source explained.

Qualcomm, by acquiring Nuvia, a company focused on Arm server and PC CPUs with an instruction set architecture licensed by the world’s leading semiconductor IP supplier, allows it to leverage this team’s CPU base for high-end mobile applications, therefore sidestepping Arm’s strategy (potentially paying only 5% of the chip price under their agreement), the source noted.

Arm’s Pre-built Cortex Designs Face Challenges from Custom Silicon Designs

To put things in context, Qualcomm’s acquisition of Nuvia indicates its efforts to develop custom Snapdragon cores and reduce dependence on Arm’s pre-built Cortex designs, which is now the main approach adopted by several tech giants.

For instance, according to the report by The Register, the Oryon CPU cores featured in Qualcomm’s latest Snapdragon X Elite are based on Arm’s v8.7-A ISA, which are similar to earlier designs prior to Nuvia’s integration into Qualcomm However, this strategy allows Qualcomm to create cores tailored to its specific requirements, making it capable of competing directly with Apple’s M-series and challenge Intel and AMD in the notebook sector, the report notes.

On the other hand, Apple is leading the way in custom chips, as it has shifted from the traditional licensing model to create proprietary designs. Earlier in May, Apple announced M4, which is built using second-generation 3-nm technology. A report by Wccftech also suggests that the Cupertino tech giant is preparing for the next-gen chipset, M5, which is said to be launched next year.

According to the analysis by The Register, Apple’s strategy for custom silicon stands in contrast to Arm’s, which offers a broad ecosystem based on its Instruction Set Architecture (ISA). In contrast, Apple manages both its hardware and software ecosystems using its signature iEverything approach.

Nevertheless, it would be hasty to underestimate Arm’s impact. The Register highlights that MediaTek recently revealed that it is maintaining the Armv9 architecture for its new Dimensity 9400 chips, indicating that Arm’s Cortex-X4 and A720 cores are still competitive.

Read more

• [News] Arm Holdings Reportedly Cancels Qualcomm Chip Design License
  
• [News] Taiwanese Chipmaker MediaTek Likely to Benefit Most from Arm-Qualcomm Licensing Dispute

(Photo credit: Qualcomm)