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.

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• [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)

TSMC has halted shipments to Chinese chip designer Sophgo after a chip it manufactured was reportedly found in a Huawei AI processor, according to Reuters, which cited two sources familiar with the situation.

The Reuters report noted that Sophgo had ordered chips from TSMC identical to the one detected in Huawei’s Ascend 910B processor. Huawei, restricted from acquiring certain technology to protect U.S. national security, is under stringent export controls. However, Reuters reported that it remains unclear how the chip ended up in Huawei’s product.

On Sunday, Sophgo posted a statement on its website asserting it has never engaged in any direct or indirect business relationship with Huawei and conducts its operations in strict compliance with all applicable laws, including U.S. export control regulations. The company affirmed it has never breached any of these laws or regulations.

Sophgo, which is affiliated with cryptocurrency mining equipment maker Bitmain, also noted it had submitted a detailed investigation report to TSMC to confirm its non-involvement with Huawei.

TSMC declined to comment, according to Reuters, while Huawei has not yet responded to requests for comment. The U.S. Department of Commerce acknowledged awareness of potential export control violations but declined to comment on any active investigations.

(Photo credit: Sophgo)

Following Qualcomm’s recent launch of Snapdragon 8 Elite, it was confronted by Arm Holdings to terminate its architectural license agreement with Qualcomm, which permitted the U.S. chip giant to use Arm’s intellectual property for chip design, according to Bloomberg. According to the reports by MoneyDJ and Commercial Times, Taiwan-based smartphone IC designer MediaTek may turn out to be the main beneficiary amid the dispute.

According to media reports, Arm has issued a mandatory 60-day notice to Qualcomm regarding the cancellation of the licensing agreement, which previously enabled the latter to develop its own chips based on Arm’s proprietary standards.

Citing sources familiar with the industry, the report by MoneyDJ notes that the move implies the strained relationship between a major IP supplier and a leading mobile chip firm. If the licensing agreement does break up, it would be detrimental to both parties. Therefore, Arm’s act seems rather to be a “push for peace through conflict,” the source observes.

According to sources cited by the Commercial Times, it is likely that the two parties would eventually reach a reconciliation, as Arm’s ultimate goal might be securing a share of the profits from the Snapdragon series chips. While the AI PC ecosystem led by Arm architecture is still in its nascent stage, the company can only garner more licensing fees if Qualcomm actively promotes its WoA (Windows on Arm) products, the report suggests.

According to Commercial Times, MediaTek will likely benefit as brand manufacturers prefer chip suppliers with no litigation concerns and who also offer competitive pricing.

MediaTek’s upcoming launch of a Windows on Arm (WoA) solution will further strengthen its collaboration between Arm and Taiwanese manufacturers, the report notes. A previous report by Wccftech notes that MediaTek has teamed up with NVIDIA to develop a custom chip to confront Qualcomm’s Snapdragon X Elite series, which will be manufactured using TSMC’s 3nm node, based on ARM architecture.

On the other hand, institutional investors cited by MoneyDJ also believe that the ongoing lawsuit between Arm and Qualcomm could benefit MediaTek, helping the Taiwanese chip giant further expand its market share in the flagship smartphone segment. It is also worth noting that MediaTek’s newly-launched Dimensity 9400 reportedly offers higher price-performance ratio compared to Qualcomm’s Snapdragon 8 Elite, according to MoneyDJ.

According to a report by Wccftech, MediaTek’s Dimensity 9400, built with TSMC’s N3E node, may be priced at around USD 155 per chipset, reportedly 20% higher than that of the Dimensity 9300. Also built with TSMC’s N3E node, Qualcomm’s Snapdragon 8 Elite is expected to be priced at around USD 180, with an ASP increase of about 15%, according to analyst Ming-Chi Kuo.

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• [News] Arm Holdings Reportedly Cancels Qualcomm Chip Design License
  
• [News] Qualcomm Rumored to Decide Its Next Move Regarding Potential Intel Acquisition after US Election

(Photo credit: MediaTek)

As Qualcomm unveiled the Snapdragon 8 Elite chipset earlier this week, Samsung, which has been working on its in-house Exynos 2500 to improve the 3nm yield, is said to abandon the plan and go Snapdragon 8 Elite only for the entire Galaxy S25 series. To turn the tide, it is reportedly embarking on the development of its next-gen Exynos chip, set to be featured in the Galaxy S27, according to Korean media outlet Sedaily and Wccftech.

The chip is expected to be manufactured with Samsung’s 2nm node, probably the SF2P process, which is an improved version of its first generation 2nm process, the reports note. Therefore, this would be a key battleground for Samsung, as it has been suffering from yield issues regarding 3nm node with GAA architecture for long.

And it does look like that Samsung aims high for the chipset, as the next-gen Exynos chip has been reportedly codenamed “Ulysses,” the Roman name for Odysseus, the hero from Greek mythology, according to Sedaily.

According to the reports, the SF2P process is slated for mass production in 2026, with enhancements in both performance and power efficiency. To be more specific, SF2P aims to improve performance by 12% while reducing power consumption by 25% and chip area by 8% compared to its predecessor.

It is also worth noting that Samsung’s foundry division is reportedly producing test chips and verifying the process design to refine the node.

Citing an industry expert, Sedaily notes that Samsung’s foundry has consistently relied on Exynos APs as a key customer. By refining its processes through managing substantial Exynos orders, Samsung has the potential to enhance its competitiveness against TSMC in next-generation chip manufacturing, although the challenge remains significant.

The challenges ahead for Samsung is formidable for sure. Foundry giant TSMC’s 2nm is expected to enter volume production in 2025, and it is already creating a buzz, as Chairman C.C. Wei said earlier that customer inquiries for 2nm are even higher than those for 3nm. According to previous market speculations, tech giants such as Apple, NVIDIA and AMD are believed to be the first batch of TSMC’s 2nm customers.

Another major rival, Intel, has shelved the 20A process node to focus entirely on the more advanced Intel 18A, aiming to enter mass production in 2025.

Japanese chip manufacturer Rapidus, on the other hand, plans to establish a fully automated production line using robots and AI in northern Japan to produce 2nm chips for advanced AI applications, with mass production anticipated as early as 2027.

Read more

• [News] Samsung’s Next Move? Early HBM4 Mass-production and 2nm Foundry Solutions Could Be the Cure
• [News] Despite 3nm Issues, Samsung Plans to Speed up 2nm/1.4nm Expansion Next Year

(Photo credit: Samsung)

Arm Holdings Plc is terminating its architectural license agreement with Qualcomm Inc., which permitted Qualcomm to use Arm’s intellectual property for chip design, Bloomberg reported on Tuesday.

According to the report, Arm has issued a mandatory 60-day notice to Qualcomm regarding the cancellation of the licensing agreement. This contract previously enabled Qualcomm to develop its own chips based on Arm’s proprietary standards.

Arm declined to comment on the situation, while Qualcomm did not respond to a request for comment from Reuters outside of regular business hours.

This announcement coincides with an ongoing legal battle between the two tech companies, which is slated to begin in federal court in Delaware this December.

The British firm, majority-owned by Japan’s SoftBank Group, filed a lawsuit against Qualcomm in 2022 for allegedly failing to negotiate a new licensing agreement after acquiring a new company.

The lawsuit centers on technology acquired by Qualcomm from Nuvia, a startup founded by former Apple chip engineers, which Qualcomm purchased for $1.4 billion in 2021. Qualcomm aimed to leverage Nuvia’s technology to compete with Apple by developing chips that could rival the Apple M-series processors and challenge the desktop market dominated by Intel and AMD.

While the acquisition was initially seen as routine, Arm claims that Qualcomm’s use of Nuvia’s designs violates the licensing agreement. The licenses granted to Nuvia were specifically intended for a startup and could not be directly used by Qualcomm without Arm’s approval.

Arm has previously emphasized that, ‘Arm is filing this claim to protect Arm, our partners, and the unparalleled ecosystem we have built together. Arm and its partners have invested billions of dollars to create industry-leading intellectual property. Because Qualcomm attempted to transfer Nuvia licenses without Arm’s consent, which is a standard restriction under Arm’s license agreements, Nuvia’s licenses were terminated in March 2022. Before and after that date, Arm made multiple good faith efforts to seek a resolution. In contrast, Qualcomm has breached the terms of the Arm license agreement by continuing development under the terminated licenses. Arm was left with no choice but to bring this claim against Qualcomm and Nuvia to protect our IP, our business, and to ensure customers are able to access valid Arm-based products.’

(Photo credit: Arm)