Arm, Qualcomm Engage In Legal Fight Over The Latter's Nuvia Acquisition

Chip technology firm Softbank Group Corp's SFTBY Arm Ltd sued Qualcomm Inc QCOM for the breach of license and trademark agreements by its chip design firm Nuvia Inc, Reuters reports.
Arm sought an injunction requiring Qualcomm to destroy designs developed under Nuvia's license agreements with Arm.
"Arm's complaint ignores the fact that Qualcomm has broad, well-established license rights covering its custom-designed CPU's, and we are confident those rights will be affirmed," the report cited Qualcomm General Counsel Ann Chaplin.
Qualcomm, which acquired Nuvia for $1.4 billion last year, said Arm has no right to interfere with Qualcomm's or Nuvia's innovations.
Qualcomm aimed to challenge Intel Corp INTC and Advanced Micro Devices Inc AMD in the PC and laptop markets with the help of Nuvia's Arm-based designs.
Some Qualcomm insiders privately complained that Arm's slacked innovation pace caused Qualcomm's chips to lag behind Apple Inc's AAPL processors in performance.
"Qualcomm's opportunity moving forward with the PC (and potentially server) business is utterly dependent on Nuvia designs, and Nuvia is the primary means by which Arm can get into Windows PCs. So the companies really need to partner well if they want to have a meaningful impact on the PC market," the report cited Bob O'Donnell of TECHnalysis Research.
In the past, most of Qualcomm's chips relied on computing cores licensed directly from Arm, while Nuvia's cores use Arm's underlying architecture but are custom designs, the report added.
Qualcomm opportunistically reentered the Arm server market with a Nuvia-based server CPU, analysts say. However, it is still prioritizing PC and smartphone-based Nuvia platforms first.
Analysts see ample PC opportunity with Nuvia PC and server/AI chips.
Qualcomm expressed interest in procuring a stake in Arm. As demand for semiconductors doubles over the next decade and the world struggles to recover from a multiyear chip crisis, technology manufacturers see every modern electronics rely on Arm's designs more than ever.
Recently, Qualcomm eyed the server processors market to tap a $28 billion industry and decrease its reliance on smartphones.
Price Action: QCOM shares closed lower by 1.04% at $132.27 on Wednesday.

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