ARM wants to ban its possibly biggest partner from Nuvia’s advanced CPU cores, which are better than its Cortexes, and demands that it delete the results of their development.
Patent and licensing disputes are a fairly common vehicle in the computer industry, often as part of a competitive struggle. But it’s even weirder when something like this breaks out between partners or a supplier and a customer. This has now surprisingly become one of the largest manufacturers of ARM processors Qualcomm. ARM itself wants to ban it from using the advanced architecture of the Nuvia cores, in which, paradoxically, hopes were placed that it would win ARM more of the PC market.
Qualcomm and Nuvia = 1 license + 1 license = 0 licenses?
For context, a reminder of the situation is probably good. You probably know that Qualcomm is one of the largest manufacturers of mobile chips for phones that are based on the ARM architecture. Qualcomm now licenses the standard cores of the Cortex line designed by ARM, but the company also has a so-called architectural license, which gives the company the right to use the same ARM instruction set, but to design the core in-house. That’s what Qualcomm used for a long time before the advent of the 64-bit era up until the Snapdragon 820 before switching to Cortex cores.
Cortex cores have good efficiency (which is why Qualcomm, but also for example Samsung switched to them), but the performance is not so high compared to x86 cores from AMD and Intel, but also compared to directly competing ARM cores from Apple. This is probably one of the biggest obstacles that Qualcomm has encountered in trying to directly compete with AMD and Intel in the PC market – it managed to work with Microsoft on Windows 10 and 11 on its processors and get such laptops on the market, but there is not much interest in them. The performance is lower, so it becomes a problem that applications not translated directly for the ARM architecture need to be run via emulation, just like with Apple.
And this is where Nuvia comes in. This company was created almost as a star startup – it was founded by high-ranking Apple employees who were behind its highly successful CPU architectures, and from the beginning, hopes were placed in Nuvia that it would repeat the success of Apple (and sometimes rather exaggerated ideas that it would completely overtake Intel and AMD). Nuvia did announce a core that promised massive performance (when it’s ready in a few years), but it did announce a plan to focus on server processors.
And here begins the dispute with ARM. Qualcomm bought Nuvia for quite a lot of money and announced that it will use its cores instead of Cortex cores in laptop processors. They were thus developed under an architectural license instead of a license directly for cores from ARM. It’s still unclear what kind of architecture Nuvia will produce, but if it lives up to its massive hype, Qualcomm’s ARM laptop processors could be the equivalent of what’s priced on Apple’s M1 and M2 processors.
It would seem that this should be convenient for ARM, because if it were possible to establish ARM processors as a standard platform for Windows, ARM would have additional income from another market and, moreover, it would weaken and potentially start to replace the biggest competition (x86 processors).
According to ARM, the Nuvia CPU cores are illegal and should be destroyed
But instead comes a surprise: ARM took Qualcomm to court, and paradoxically, at least from the outside, it looks exactly like it wants to kill this spread. The company complains in the lawsuit that Qualcomm is violating the license agreement and does not have the right to use the architecture bought together with Nuvia. According to ARM, the Nuvia license is invalid after the purchase by Qualcomm, and beware, according to ARM, it was illegal for Qualcomm to continue development, and what is probably the most piquant part: ARM at least on the face of it (in practice, it is probably just an attempt to gain strong leverage on the sued party) demands that Qualcomm he not only did not use, but straight up “destroyed” the result of this allegedly illegal development of Nuvia cores and processors. Of course, it would be a big financial (and “man-hour”) loss for Qualcomm, but it would probably be an even bigger loss to the plan to push ARM into Windows laptops.
It’s worth pointing out here that Nuvia had a legitimate architectural license that allowed it to develop what it was developing, namely a custom kernel with ARM’s instruction set. As far as is known, Qualcomm also still has this architectural license, which entitles it to develop its own architectures with the ARM instruction set. So in layman’s terms it would appear that there is no problem, but ARM disagrees, arguing that Nuvia did not have the right to transfer IP developed under its license to Qualcomm and that this breach extinguished its negotiated license. According to some interpretations, the problem may be that Nuvia’s license was really only for server use, there were opinions that Qualcomm’s license was only for mobile use (however, the question is whether this is true at all, because a few years ago Qualcomm developed the ARM server core and even launched it on the market, so it had a license, and judging by AMD, which allegedly still holds its own, companies don’t just end it when they stop using it).
According to ARM, this is how Nuvia (owned by Qualcomm) lost its license in March 2022 and did not respond to calls for some renegotiation of the license. The suit thus declares the development of related products and architectures illegal and seeks “destruction of certain Nuvia designs” in addition to damages for trademark infringement. The lawsuit is filed in Delaware court, by the way.
On the other hand, Qualcomm told the media that, according to him, the lawsuit is not justified and “ignores” the fact that the company has a broad (apparently in the sense of the area of activities it allows) and well-founded license. Qualcomm denies that the contract or anything else gives ARM the right to interfere with and impede product development and other activities. We don’t have enough information, so it’s hard to say who would eventually succeed in court and whether ARM really doesn’t have loopholes in the license agreements that Qualcomm can catch and punish.
Qualcomm also mentions in a statement that it considers it unfortunate how this move by ARM has derailed and damaged a long-standing successful cooperation. Such statements are quite common in commercial disputes. But here, in a situation where Qualcomm is one of the largest and most strategically important customers, has a proper license of its own, is not known to avoid paying, and seems to be sued for technicalities, it does not sound completely empty.
The real goal is probably an agreement on higher royalties
As mentioned, ARM did not exactly start this confrontation with gloves on, with the demand to throw away and destroy the technology developed that cost billions of dollars. However, this is probably not a realistic goal of the company. Although ARM may be jealous here, if Qualcomm were to sell laptop processors with its own cores (and better ones at that), it would receive less fees for this through the architectural license than if Qualcomm paid for some eight or more Cortex cores for each SoC. But ARM also can’t help but see that Cortexes haven’t been successful in notebooks yet, and their performance isn’t increasing at a pace to catch up with Apple, Intel and AMD and change that.
There have been opinions in various places that what ARM really wants is to simply push Qualcomm into signing new contracts that would carry higher fees than the company is paying now. Architectural licenses seem to be very long-term, and it is possible that at the time when Qualcomm acquired it, they had it on very cheap terms, and now they are paying royalties that are less than ARM would be comfortable with. But again, we have no idea how it is in reality, whether Qualcomm’s payments are fair or really inadequately low.
ARM recently announced layoffs and restructuring in an attempt to increase the profitability of the company after the plan to sell it to Nvidia failed (it failed in antitrust proceedings not only in China, where politically motivated obstructions were expected, but also in the domestic USA, where antitrust considerations probably prevailed). ARM is due to go public in an IPO instead, and the company wants to have the best looking profits and margins possible. The effort to get more money from Qualcomm, or other clients (despite the risk of spoiling long-term relationships), may also be an effort to improve the “monetization” of the intellectual property that ARM holds.
However, ARM probably also sent a pretty strong signal that the freer license of the RISC-V architecture has something to it. Although it is true that the ARM instruction set has significant advantages of a mature ecosystem and, apparently, a better and more powerful design, the company has thus added to the imaginary scales in the thinking of companies that will consider competing RISC-V as an alternative.
Sources: ARM, The Register
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