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)

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)

Ahead of TSMC’s upcoming third-quarter earnings call this Thursday, a report by the Commercial Times gives a heads-up on the foundry giant’s outlook of 3nm orders next year. With NVIDIA and AMD ramping up their next-gen AI accelerators, combined with the strong demand from smartphone chips, orders for TSMC’s 3nm node are set to see a surge in 2025, the report indicates.

According to analysts cited by the report, most flagship smartphone chips are expected to be manufactured with 3nm next year. For instance, Apple’s A19 Pro is said to adopt TSMC’s N3P process, while the Android phones are likely to follow suit.

In terms of the demand from AI accelerators, the report notes that AMD’s MI350 series will likely be manufactured with the 3nm node, which is going to benefit TSMC.

It is worth noting that according to another report by Commercial Times, at Advancing AI 2024 last week, AMD CEO Lisa Su highlighted the company’s close partnership with TSMC, saying that she would be glad to see the CHIPS Act bringing more manufacturing lines back to the U.S.

Sources cited by Commercial Times suggest that for now, AMD has no plans to collaborate with chip makers other than TSMC, and that the company is currently conducting a qualification assessment for chip production at TSMC’s Arizona fab (Fab 21).

On the other hand, Commercial Times indicates that NVIDIA’s orders on TSMC will likely see an increase next year, which would further tighten the foundry giant’s capacity in 3nm and 5nm. NVIDIA’s R-series GPUs are reportedly to be manufactured with TSMC’s 3nm as well, the report notes, but it would not be released until 2026.

TSMC is expected to see strong 3nm demands from other tech giants in 2025 as well. According to the report, Intel is said to outsource most of its Lunar Lake chips to TSMC, while the AI PC chip MediaTek co-develops with NVIDIA is also rumored to be built using the 3nm process. The report states that this chip is expected to debut in the second quarter of next year and enter mass production in the third quarter.

Sources cited by the report note that as clients turn to place orders on 3nm for their latest AI accelerators, foundry capacity will further be strained. Notably, TSMC’s CoWoS packaging reportedly allows interposers reaching 3.3 times for its maximum reticle size to manufacture chips such as NVIDIA’s B200, AMD’s MI300, or Intel’s Gaudi 3, with the number of chips produced on per interposer becoming fewer.

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• [News] Intel Shifts to TSMC for Chip Production: A Looming Threat for AMD?
• [News] NVIDIA and MediaTek Reportedly Team up on 3nm AI PC Processors, with Tape-outs Expected This Month

(Photo credit: TSMC)

MediaTek, a leading IC design company, has unveiled its flagship 5G Agentic AI processor, the Dimensity 9400, positioning it as an Arm PC-class processor. The chip features a second-generation all-big-core design, combining Arm v9.2 CPU architecture with advanced GPU and NPU technologies, promising high performance and ultra-energy efficiency. According to a report from TechNews, products powered by the Dimensity 9400 are expected to hit the market soon, setting the stage for a showdown with Apple’s A18 and Qualcomm’s Snapdragon 8 Gen 4.

The Dimensity 9400 employs a second-generation all-big-core CPU, featuring a single Arm Cortex-X925 core clocked at 3.62GHz, three Cortex-X4 cores, and four Cortex-A720 performance cores. Compared to its predecessor, the Dimensity 9300, the new chip offers a 35% boost in single-core performance and a 28% improvement in multi-core performance. Additionally, the Dimensity 9400 is built on TSMC’s advanced 3nm (N3E) process, resulting in a 40% reduction in power consumption, providing users with significantly longer battery life.

The processor also integrates MediaTek’s 8th-gen AI processor, the NPU 890, which supports on-device LoRA training and high-definition image generation, while offering developers access to Agentic AI capabilities. This results in a substantial improvement in AI performance and efficiency compared to the previous generation, with an 80% increase in prompt performance for large language models (LLM) and a 35% reduction in power consumption.

TechNews also highlighted that while the Dimensity 9400 emphasizes its all-big-core design, the configuration differs slightly from the previous Dimensity 9300, which used four Cortex-X4 cores and four Cortex-A720 cores. MediaTek explained that the new design was made for energy efficiency, as users don’t always need to run applications at the highest clock speeds of all big cores. Whether the performance lives up to MediaTek’s claims will be determined once the actual products hit the market.

Even before its launch, the Dimensity 9400 generated significant market interest. Reports suggest that vivo’s X200 series and OPPO’s Find X8 will be among the first devices to feature the new processor. Additionally, Samsung is considering replacing its in-house Exynos processor with the Dimensity 9400 in its upcoming Galaxy S25 series, set for release in 2025.

(Photo credit: MediaTek)

In addition to its latest smartphone chipset Dimensity 9400, MediaTek seems to be working on another killer product. According to the reports by Chinese media outlet IT Home and Tom’s Hardware, the Taiwanese IC design giant is teaming up with NVIDIA on an AI processor, which is expected to be manufactured with 3nm and scheduled to be taped out later this month.

According to the reports, the chip is said to enter mass production by late 2025.

According to Tom’s Hardware, building on insights from Qualcomm’s Snapdragon X Elite launch, there’s room for a new Windows-on-Arm competitor from a mobile-focused company like MediaTek. As Qualcomm’s Snapdragon X Elite is comparatively weak in its graphic performance, this creates a market for NVIDIA and MediaTek to step in.

MediaTek’s upcoming AI processor is reportedly to be paired with NVIDIA’s GPU, while major laptop companies led by Dell, HP, Lenovo and Asus are said to be potential customers for the product, the reports note. According to a previous report by the Economic Daily News, the processor is rumored to be priced around USD 300.

It is also worth noting that MediaTek, which is known for its leading position on mobile chipsets, typically partners with AMD for hardware, with AMD utilizing MediaTek’s Wi-Fi 6E solutions in its mobile platforms, according to Tom’s Hardware. There have also been longstanding rumors of a 5G notebook collaboration between the two companies, the report says.

Therefore, it would be somewhat interesting if MediaTek does turn to NVIDIA, AMD’s biggest rival, for collaboration. However, as NVIDIA currently holds the throne of AI processors, it would not be surprising that MediaTek teams up with the U.S. AI giant when it chooses to expand its foothold to the AI PC sector.

It would not be the first time the two companies team up, though. In March, MediaTek announced at NVIDIA GTC four new automotive SoCs within its Dimensity Auto Cockpit portfolio, offering powerful AI in-cabin experiences for the next generation of intelligent vehicles.

For more details, it integrates an NVIDIA RTX GPU, which supports ray tracing for realistic visuals and lighting effects in games, plus AI upscaling and frame generation for fast, fluid action, according to MediaTek’s press release.

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• [News] MediaTek Ventures into AI Accelerators, Aiming to Release Dimensity 9400 in October
• [News] MediaTek Reportedly Teams up with NVIDIA, Aiming AI PC Chip Launch in 1H25 

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