Chip design group Arm sues Qualcomm for breach of contract

Chip design group Arm sues Qualcomm for breach of contract

UK-based chip design group Arm has sued one of its major clients, Qualcomm, accusing the company of breach of contract and trademark infringement over its attempt to create new chip designs that effectively put it in direct competition with Arm itself.

The lawsuit, filed Wednesday in federal court in Delaware, over Qualcomm’s rights to use chip designs it acquired after purchasing chip startup Nuvia last year.

The $1.4 billion purchase of the two-year-old start-up, which was founded by former Apple and Google employees, is seen as a critical step in Qualcomm’s efforts to design more efficient computer processors, or CPUs, to complement of core strengths in Qualcomm. mobile communication.

In addition to improving the performance of its smartphone chips, Qualcomm hopes to use the acquisition as a way to break into the data center market, selling its own server processors in competition with chip companies such as Intel and Nvidia, as well as tech giants such as Amazon that also make their own. chips design.

The lawsuit, seeking unspecified damages, could also complicate an important strategic partnership for Qualcomm. Cristiano Amon, the mobile chipmaker’s CEO, said earlier this year that his company wanted to buy a stake in Arm and set up a consortium to acquire it to ensure its technology remains widely available.

Qualcomm is said to have been one of the companies objecting to Nvidia’s attempts to buy Arm from Japanese owner SoftBank. The deal was called off earlier this year after regulators objected.

According to the lawsuit, Nuvia’s designs were developed under an Arm architecture license, which allows other companies to develop basic chip designs based on Arm technology. Arm said Qualcomm had failed to design CPUs under an architecture license with a similar effort, forcing it instead to buy chip designs directly from Arm under another form of technology license.

By using the Nuvia designs without Arm’s permission, Qualcomm effectively avoided the need to buy chip designs directly from Arm, the lawsuit added.

Amon said earlier this year that if Arm were able to come up with better designs than Nuvia’s in the future, Qualcomm could buy them from Arm instead. That comment “confirmed the negative impact” Qualcomm’s attempt to use Nuvia’s designs would have on Arm’s business, according to the lawsuit.

Qualcomm did not immediately comment on the lawsuit.

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